I'd like to read more about the recruiting process of firms. Signalling theory and game theory can be a useful tool to better understand this phenomena.

For example:

  • Applicants, who ask for higher wages, tend to have a higher willingness to work. Then a good strategy is to ask for higher compensation, in order to get the job.
  • There are companies at Job Fairs, which try pretty aggressively to get e-mail addresses / cellphone numbers. Companies with higher reputation don't have to be that active on the job market, applicants will "automatically" gravitate to them.

Maybe the second case is a bit stupid, but I gave you a hint. Do you know any articles on the signalling theory / game theory / asymmetric information of the firms' recruiting process? Thank you in advance.

  • $\begingroup$ The second case isn't stupid, it shows how some firms have more power than others. Anyway, what is your experience with game theory and such? This will help me better recommend articles. $\endgroup$ – c4sadler May 9 '17 at 17:12
  • 1
    $\begingroup$ I had some graduate level game-theory topics from Jehle-Reny and Rubinstein books at the university. Those included zero-sum games, prisoners' dilemma, sequential games, evolutionary stability, bayesian games, cho-kreps, mixed strategy, games with more than two players, etc. However, I'm not necessarily looking for high level game theory, but the framework. $\endgroup$ – Übel Yildmar May 9 '17 at 18:21

It sounds like you have a background in game theory. Here is a Game Theory text available for free through RAND if you (or anyone else) wants a refreasher: http://www.rand.org/pubs/commercial_books/CB113-1.html

Below are some articles from which you should be able to draw information. Most are not specific to recruiting, but the underlying theory is certainly applicable. If you continue to be interested in this topic, you will find a great deal of information in the literature on social capital, product value signaling (one article included below), and value signaling as it relates to credentials. Denesp recommended a great paper; plug it into google scholar and see which papers cite that one. Doing this you may find a ton of information.

Here is a paper published that takes a game theoretic look at the legal profession. It doesn't directly relate to your scenario, but the concepts and framing certainly do (this is on google scholar): Rasmusen, E., Raghav, M., & Ramseyer, M. (2009). Convictions versus conviction rates: the prosecutor's choice. American Law and Economics Review, 11(1), 47-78.

Here is an article, also available on Google Scholar, that contends with imperfect information: Rothschild, M., & Stiglitz, J. (1976). Equilibrium in competitive insurance markets: An essay on the economics of imperfect information. The quarterly journal of economics, 629-649.

Here is one specific to Signaling Games: Cho, I. K., & Kreps, D. M. (1987). Signaling games and stable equilibria. The Quarterly Journal of Economics, 102(2), 179-221.

Also about signaling: Kirmani, A., & Rao, A. R. (2000). No pain, no gain: A critical review of the literature on signaling unobservable product quality. Journal of marketing, 64(2), 66-79.

Related to employment: Leana, C. R., & Van Buren, H. J. (1999). Organizational social capital and employment practices. Academy of management review, 24(3), 538-555.


There is the famous 1973 "Job Market Signalling" paper by Michael Spence.


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