Selecting Applicants.

Frankel, Alex

A firm selects applicants to hire based on hard information, such as a test result, and soft information, such as a manager's evaluation of an interview. The contract that the firm offers to the manager can be thought of as a restriction on acceptance rates as a function of test results. I characterize optimal acceptance rate functions both when the firm knows the manager's mix of information and biases and when the firm is uncertain. These contracts may admit a simple implementation in which the manager can accept any set of applicants with a sufficiently high average test score.

TEST scoring; EXECUTIVES

Econometrica, 2021, Vol 89, Issue 2, p615

0012-9682

Academic Journal

10.3982/ECTA15510