Competitive Pressure and Job Interview Lying: A Game Theoretical Analysis

Abstract: We consider a job contest in which candidates go through interviews (cheap talk) and are subject to reference checks. We show how competitive pressure- increasing the ratio of "good " to "bad " type candi-dates- can lead to a vast increase in lying and in some cases make bad hires more likely. As the number of candidates increases, it becomes harder to in-duce truth-telling. The interview stage becomes redundant if the candidates, a priori, know each others ' type or the result of their own reference check. Finally, we show that the employer can benefit from committing not to reject all the applicants. JEL Code: D82; L20.