Working Papers

Failed Searches

How the choice set of job applicants affects an employer's likelihood of making an offer


Most accounts of hiring focus on understanding why a particular job candidate was chosen and do not examine hiring as an outcome for the employer. I suggest that a focus on developing a better understanding of failed searches, job openings which end unfilled, is a valuable, yet understudied, piece of the hiring puzzle. I do so here by highlighting the effect of an employer’s choice set on whether a job offer is extended to any candidate. In particular, I hypothesize that the categorical overlap among the candidates who apply affects the likelihood of an offer being extended. Because a hiring decision is one an employer seeks to maximize, comparisons are effortful. The less overlap in the background of job candidates’, the more difficult it is to compare them, the less likely any decision will be made. To support my contention that this is driven by cognitive effort, I further predict that choice set commensurability issues are less salient for jobs which are more urgent; suggesting variation in satisficing and maximizing motivations. Finally, commensurability is more challenging for employers with greater categorical fluency because differences among candidates are further exacerbated by the employer’s more nuanced expectations. I demonstrate support for my contentions with data from Elance, an online market for freelancing services.