Competitiveness and referrals

This project seeks to investigate the efficacy of competitive individuals in making job referrals. While competitiveness is often prized for its role in achieving personal and organizational success, its impact on job referral quality remains ambiguous. Competitive individuals might prioritize their networks' success, resulting in high-quality referrals. Conversely, their competitive nature might lead to biased or self-serving referrals, compromising the hiring process's integrity.

To study this, I design an experiment with two phases. In the first phase, participants choose their pay scheme—competitive or performance-based—for their task performance and make their referral decisions. Each can make up to 5 referrals. In the second phase, the referred individuals perform the task independently. To identify potential channels for motivating better referrals, I design three treatments. In Treatment 1, participants are paid based on the performance of their referrals if one of them is chosen. In Treatment 2, participants are paid only if their referral’s performance matches or exceeds their own. Treatment 3 involves participants being paid only if their referral’s performance matches or exceeds that of a randomly chosen participant.

An additional question this study addresses is whether competitive individuals are more likely to recommend competitive referrals. This is an exploration into the social ties that competitive individuals activate in labor market interactions. By examining these dynamics, the study aims to provide insights into optimizing recruitment strategies and fostering a more effective and equitable hiring environment.