Adverse selection and unraveling in common-value labor markets

Jeffrey C. Ely, Ron Siegel

We investigate a common-value labor setting in which firms interview a worker prior to hiring. When firms have private information about the worker’s value and interview decisions are kept private, many firms may enter the market, interview, and hire with positive probability. When firms’ interview decisions are revealed, severe adverse selection arises. As a result, all firms except for the highest-ranked firm are excluded from the hiring process.

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Year of publication:	September 2013
Authors:	Ely, Jeffrey C. ; Siegel, Ron
Published in:	Theoretical economics : TE ; an open access journal in economic theory. - Toronto : [Verlag nicht ermittelbar], ISSN 1555-7561, ZDB-ID 2220447-7. - Vol. 8.2013, 3, p. 801-827
Subject:	Adverse selection \| unraveling \| interviews \| Adverse Selektion \| Theorie \| Theory \| Arbeitsmarkt \| Labour market \| Asymmetrische Information \| Asymmetric information \| Befragung \| Interview \| Personalbeschaffung \| Recruitment

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.3982/TE964 [DOI] hdl:10419/150209 [Handle]
Classification:	D02 - Institutions: Design, Formation, and Operations ; D82 - Asymmetric and Private Information ; J44 - Professional Labor Markets and Occupations
Source:	ECONIS - Online Catalogue of the ZBW

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