TITLE:
Worker Recruiting with Favoritism and Bribery
AUTHORS:
Gen Chen, Jun Tang
KEYWORDS:
Recruiting, Social Tie, Favoritism, Bribery
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.3,
June
26,
2015
ABSTRACT: This paper discusses the corruptive action widespread in the
organizations’ worker recruiting: favoritism and bribery. The managers of the
firm are actually able to discern the type of the productivity of the
job-seekers, but they utilize the information advantage through the two types
of misconduct—favoritism and bribery, at the
expense of the profit share of the principal (the owner) and the workers’
wage rent. The key conclusion is drawn from this paper as follows: neither the
intensity of favoritism nor the wage level matters in determining whether
there’s profit or loss in the firm, whereas the key variable is the relative
situation of exterior labor market.