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.
Why is it important for the recruiting university to identify and discard applicants who would not accept the job in the end? Well, this is because the recruiting process is a long and labor-intensive one. It can take easily more than a year. It involves first meetings about the desired professorial profile, posting adverts, reading CVs and the applicants’ work, asking for external reviewers and giving them time to rank the candidates, inviting a list of candidates for hearings, holding these hearings and evaluating these, long negotiations about the salary and general working conditions, before finally, an applicant accepts or, more problematically, rejects the offer. Moreover, for whatever reasons, most universities only allow a final shortlist of three applicants, ranked as 1, 2, and 3, that will be offered the job sequentially. And, finally, on top of that, it is often the case that if none of the three candidates accepts the job, the university authorities reconsider whether the professorship position should be filled at all. The recruitment committee, thus, often has only one chance to fill this professorship position. So, if all three applicants on the list turn down the offer, it is a small disaster.
What can recruiters do to prevent this disaster? The starting point for solving our problem is the typically reasonable assumption that applicants who would accept the job offer tend to have a higher eagerness to get an offer than those who will just use it to renegotiate at home. And eager applicants would probably be prepared to do more hard work to get a job offer than the not so eager ones. But what work could this be? It has to be relevant for the job, otherwise, university law will not allow it. You can’t ask applicants to run 10 marathons as a requirement for becoming a professor of macroeconomic theory. You could ask them to present 10 of their research papers, but that they would love to do anyway, whether they want the job or not. But what you can do is to ask them to give a teaching presentation, and not just anyone, but one on a topic of your choosing. This is already not so pleasant for the applicants as it requires extra work that they cannot easily use for other purposes. On top of that, you can require applicants to explain what they would do if they were offered the job at this university, who of the people here they could see themselves working with, and how they would interpret and possibly change the current bachelor, master, and PhD curricula at this university. All this is unpleasant work for anyone, as it requires reading many pages of often slightly obtusely written curricula and often far from perfectly designed university websites. Moreover, this is work that the applicants cannot easily reuse for other purposes. But the eager ones would probably do it and would try to do it well. The not so eager ones will either not do it (and when they learn about what they have to do in the hearing, withdraw their application) or do it badly.
By asking applicants to do all this work, we have created what game theorists call a signaling game. Only the applicants themselves know their own eagerness. It is what game theorists call private information. Applicants can, however, signal their eagerness by doing all this work and doing it well. The recruiters’ aim is to construct this signaling game such that it has a so-called separating equilibrium: the eager applicants choose to do all this work and choose to do it well, while the non-eager ones either do not do it or do it badly. By creating a signaling game with a separating equilibrium, the recruitment committee is, thus, able to screen their applicants along this eagerness dimension.
A badly designed signaling game, from the recruitment committee’s point of view, has a pooling equilibrium, in which eager and non-eager applicants perform equally well. This would be the case if we only ask applicants to tell us about their research. As every researcher is happy to do that, we would in that case not be able to infer their eagerness for the job from their performance in the hearing.
Of course, even the best designed signaling game has its limitations. There is only so much we can reasonably demand from applicants and it could be that some applicants that are only interested in renegotiating at home are still sufficiently eager (to get their pay rise at home) that they do all this work regardless. But it typically helps at least to some extent.