Recruiting when not all applicants want the job

In the German-speaking world recruiting professors at universities comes with an interesting complication. Many applicants are actually not interested in the job itself. They want to be offered the job only to use it to renegotiate their salary and general working conditions at their current university. In fact, in most universities, you can only get a pay rise if you have a job offer from another university. This creates a problem for the recruiting university for two reasons. It is not that easy to detect whether applicants are only interested in renegotiation at home and, in any case, university law does not allow discarding applicants just because the recruitment committee believes that they would not accept the job. In this post, I will explain how recruiters can circumvent these problems with the use of a little bit of game theory, more specifically, the theory of screening based on costly signaling.

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