Juan D. Carillo
"On job assignments as a screening device"
JEL codes:
Keywords: screening, job allocation, career concerns, relative evaluation

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 of delegating the selection of the screening procedure to one of the agents given the expected abilities of the two competitors. We then determine the optimal degree of favoritism for the selection of agents in organizations. First, the principal should bias the choice in favor of the least able agent when the allocation of screening tasks is delegated to the most able one. Second, he should also bias the choice in favor of outsider and junior agents relative to incumbent and senior ones because the former have greater implicit (common career type) incentives than the latter to exert effort and perform efficiently. Some implications of our theory are discussed.
Pre-publication pdf copy.