SECRET SEARCH

Abstract

For high‐profile positions, should applicant identities be made public within the organisation (“open search”) or kept confidential (“secret search”)? We construct a model where an organisation seeks to hire, but where candidates' abilities are private information unless it uses open search. Rejected applicants, under open search, suffer disutility. We find: salaries are lower under secret search, the expected ability of applicants decreases as the posted (open search) salary increases, secret search is preferred by organisations where quality of candidate is relatively unimportant, and organisations will, for some parameter values, choose secret search even when open search is more efficient.