Working Paper: CEPR ID: DP2552
Authors: Juan D. Carrillo
Abstract: We study the optimal allocation of screening tasks between two agents (incumbent vs. outsider or senior vs. junior) competing for one job. First, we characterize the inefficiencies from the principal's viewpoint of delegating the selection of the screening procedure to the incumbent. In general, the information disclosed by the screening tasks and the turnover rates will be inefficiently small due to the incumbent's willingness to undertake too many of these tasks. Second, we show that it may be optimal for organizations to favour the selection of outsider/junior agents relative to incumbent/senior ones because the former have greater implicit (career concern type) incentives than the latter to exert effort and perform efficiently.
Keywords: career concerns; job allocation; personnel economics; relative evaluation; screening
JEL Codes: D21; D73; D80; L22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| delegating the selection of the screening procedure to an incumbent with higher expected ability (D82) | inefficiently small amount of information disclosed (G14) |
| incumbent has an incentive to minimize information revelation (D82) | inefficiently small amount of information disclosed (G14) |
| optimal allocation of screening tasks is to have both agents perform tasks (C78) | maximizes information revelation about their abilities (D82) |
| when an incumbent is less able than an outsider (D72) | incumbent will prefer to undertake fewer tasks (J29) |