4 ms·

What follows is an honest salary determination process, where no party has incentive to lie. It is also very fast. The rules are as follows. (Can't remember whe

by jknz 10y ago

What follows is an honest salary determination process, where no party has incentive to lie. It is also very fast. The rules are as follows. (Can't remember where I read about this.) The company and the candidate write on a piece of paper a salary. The company should write the number above which it is not willing to pay the candidate. The candidate writes the number under which she/he is not willing to work for that company. The numbers are disclosed. If there is an overlap, they sign a contract and the salary is the average of the two numbers. Otherwise, there is no hiring. Edit: the parties can play this game only once

pillowkusis 10y ago
you still have a strong incentive to lie, do you not? Since the final salary is the average of the two numbers, employers want to go as low as they can and prospects want to go as high as they can. in fact, this system punishes honesty even more than the current one -- if I am honest and the other person is dishonest, the dishonest person wins because they will pull the average in the direction they want and I get a worse deal than if we were both honest.
- jknz 10y ago
  Say the candidate is honest, wants 120k and writes down 120k. Say the company honestly wants candidate ufo 130k or less. Company plays is dishonest card and writes down 110k. Then the candidate leaves and there is no hire. If company had been honest she would have hired a fitting candidate for 125k, less than the most that company was willing to offer (130k).
  - pillowkusis 10y ago
    say the candidate wants 150 but would take as low as 120. so she writes down 120. she's actually worth 150. the company is willing to hire her at up to 150. But instead, they say 130. She gets hired at 125 as a result. If they had negotiated, they certainly would have settled closer to 150. Her honesty cost her 12k/yr. The company profits immensely from its dishonesty as long as they say a number just above the candidate's lowest.
- hyperpape 10y ago
  I think you're right. Unless both parties are completely ignorant of the others' goals and only play the game once, there is an incentive to lie. If I don't know what you'll say (and can't play the chances with multiple candidates/employers), I should say what's true. Otherwise, it seems I could expect to gain in any given "game" by raising/lowering my request until I'm at 50% confidence that our ranges will overlap.
draw_down 10y ago
Maybe read about game theory a little bit.

by jknz 10y ago

pillowkusis 10y ago

you still have a strong incentive to lie, do you not? Since the final salary is the average of the two numbers, employers want to go as low as they can and prospects want to go as high as they can. in fact, this system punishes honesty even more than the current one -- if I am honest and the other person is dishonest, the dishonest person wins because they will pull the average in the direction they want and I get a worse deal than if we were both honest.

jknz 10y ago
Say the candidate is honest, wants 120k and writes down 120k. Say the company honestly wants candidate ufo 130k or less. Company plays is dishonest card and writes down 110k. Then the candidate leaves and there is no hire. If company had been honest she would have hired a fitting candidate for 125k, less than the most that company was willing to offer (130k).
- pillowkusis 10y ago
  say the candidate wants 150 but would take as low as 120. so she writes down 120. she's actually worth 150. the company is willing to hire her at up to 150. But instead, they say 130. She gets hired at 125 as a result. If they had negotiated, they certainly would have settled closer to 150. Her honesty cost her 12k/yr. The company profits immensely from its dishonesty as long as they say a number just above the candidate's lowest.
hyperpape 10y ago
I think you're right. Unless both parties are completely ignorant of the others' goals and only play the game once, there is an incentive to lie. If I don't know what you'll say (and can't play the chances with multiple candidates/employers), I should say what's true. Otherwise, it seems I could expect to gain in any given "game" by raising/lowering my request until I'm at 50% confidence that our ranges will overlap.

draw_down 10y ago

Maybe read about game theory a little bit.