On the Magnification of Small Biases in Hiring

• 成果类型: Article
• 署名作者: Davies, Shaun William; Van Wesep, Edward D.; Waters, Brian
• 署名单位: University of Colorado System; University of Colorado Boulder
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13374
• 发表日期: 2024
• 关键词: information; contests; selection; culture

摘要

We analyze a setting in which a board must hire a chief executive officer (CEO) after exerting effort to learn about the quality of each candidate. Optimal effort is asymmetric, implying asymmetric likelihoods of each candidate being chosen. If the board has an infinitesimal bias in favor of one candidate, it allocates effort to maximize the likelihood of that candidate being chosen. Even when the board's prior is that its preferred candidate is inferior, she may still be chosen most often. A glass ceiling can also arise whereby the tendency to hire favored candidates increases as the importance of the position increases.