What kind of candidate is selected into a job when the principal has to appoint acommittee to measure the candidate's ability and select a winner through a call specifyinga wage for the job? In a model where the principal fixes the wage anticipating thecommittee's choice, under a rather natural assumption about the committee's objectivewe find that if the committee takes into account the candidate's gratitude a candidatewith less than first best ability will be selected in equilibrium. First best selection isachieved if the committee is anonymous to the candidates. If the committee could alsoset the wage the first best candidate would be selected, but the principal would be worseoff hence he would not implement full delegation.
|Number of pages||7|
|Journal||Research in Economics|
|Publication status||Published - 2018|
All Science Journal Classification (ASJC) codes
- Economics and Econometrics