DP2552 | Try Me! On Job Assignments as a Screening Device


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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.