The Rise in the Cross-sectoral Dispersion of Earnings Expectations During COVID-19

Bats, Joost; Greif, William; Kapp, Daniel S.

doi:10.2139/ssrn.3925013

Cited by 1 publication

(1 citation statement)

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“…Although the first group of articles examines various recruitment scenarios, they do not take advantage of classic mechanism or market design views. These models have quantified the multiple aspects of recruitment and the job market aspects, such as wage dispersion [33], layoff [34], quitting [35], bargaining to enter the firm [36], and bargaining to survive in the firm [37].…”

Section: Literature Reviewmentioning

confidence: 99%

Implementing Mechanism Design Framework on Recruitment with a Wage Function based on Value Engineering

2023

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The present study introduces a mechanism design theory framework to address the recruitment problem. Moreover, the study examines the features of the mechanism for the payment function based on value engineering. A two-stage model is also proposed for the mechanism based on the investigation of the initial documentation of the workers at the time of recruitment and their performance over the probationary period. The mechanism takes advantage of the concept of value engineering to account for the critical factors in selecting a firm for collaboration from a worker's perspective, such as wage and subjective preferences. Various features of the mechanism, such as incentive compatibility (honesty) of the worker and the firm, the individual rationality of the worker and the firm, and the ex-post efficiency of the mechanism were investigated based on the proposed wage by introducing the utility function of each agent. Implementing recruitment in the form of a mechanism revealed that value engineering based pricing is a weighted VCG mechanism, and one of the factors in value engineering success would thus be the practical implementation of an optimized model. Examining recruitment in the simple framework of the mechanism alongside the introduction of the proper structure to study the influence of various features of the worker and the firm indicated that it is possible to implement more complex models such as payment function change, message exchange, and release of some assumptions regarding the workers and the firm.INDEX TERMS Mechanism design theory, recruitment, value engineering.

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