No abstract

We consider a job contest in which candidates go through interviews (cheap talk) and are subject to reference checks. We show how competitive pressure -increasing the ratio of "good" to "bad" type candidates -can lead to a vast increase in lying and in some cases make bad hires more likely. As the number of candidates increases, it becomes harder to induce truth-telling. The interview stage becomes redundant if the candidates, a priori, know each others' type or the result of their own reference check.Finally, we show that the employer can benet from committing not to reject all the applicants. JEL Code: D82; L20.

A manager/mechanism designer must allocate a set of money prizes ($1, $2, .., $n) between n agents working in a team. The agents know the state i.e. who contributed most, second most, etc. The agents' preferences over prizes are state independent. We incorporate the possibility that the manager knows the state with a tiny probability and present a simple mechanism that uniquely implement prizes that respects the true state.

We develop a structural model to address the question whether, and to what extent, expert panelists engage in herd behavior when voting on important policy questions. Our data comes from FDA advisory committees voting on questions concerning the approval of new drug applications. We utilize a change in the voting procedure from sequential to simultaneous voting to identify herding. Estimates suggest that around half of the panelists are willing to vote against their private assessment if votes from previous experts indicate otherwise and, on average, 9 percent of the sequential votes are actual herd-votes. Temporary committee members are more prone to herding than regular (standing) members. We find that simultaneous voting improves information aggregation given our estimates.