DA4-Search - Rejected candidates cannot be recalled What...

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1 1 The Search Problem UGBA 143: Game Theory and Business Decisions 2 Overview Many practical scenarios involve a “search problem”: to continue searching or to stop? Drug development Product design Consumer shopping behavior Buying a house Marriage and happiness Good search strategies should balance the two: Benefit: Finding something better than the current Cost: Search cost + opportunity cost + delay cost 3 The Interview Game You are hiring a new manager Conduct up to five interviews Each interview costs resources The value of the hire depends on his/her ability, which you find out only during the interview
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Unformatted text preview: Rejected candidates cannot be recalled What cutoffs should be used to determine the hire/no-hire decision? 4 Another Game Interpret the “interview game” as the search for a life partner There is time for x “interviews” in your life They reveal the suitability of each “candidate” No concurrent “interviews” of multiple candidates Rejected candidates cannot be recalled 5 Further complications More than one open position Ability is revealed only after starting work Recall of past candidates Competition between employers Two-sided search...
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