Competitive Job Seekers: When Sharing Less Leaves Firms at a Loss

We study how job-seekers share information about jobs within their social network, and its implications for firms. We randomly increase the amount of competition for a job and find that job-seekers are:(i) less likely to share information about the job with their peers; and (ii) choose to selectively share it with fewer higher ability peers. This lowers the quality of applicants received by firms, subsequent hires made, and performance on the job — suggesting that firms who rely on social networks to disseminate job information may see lower quality applicants than expected for their most competitive positions. While randomly offering higher wages attracts better talent, it is not able to fully overcome these strategic disincentives in information sharing