www2.wiwi.hu-berlin.de/institute/wt1/papers/2002/cascades.pdf

The ultimate goal of a majority of college students, myself included, is to eventually land the perfect job. There are a number of ways to achieve such a goal and there are several factors that come into play. These factors include, but are not limited to: whom you know, what you know, and information cascades. Yes, that’s right, the same theories about herding and blindly following the guy before you that have been discussed in our Info 204 classroom setting do in fact have an effect on your job application process. In their paper, “Information cascades on the labor market,” Dorothea Kübler and Georg Weizsäcker discuss their findings about the effects of information cascades on potential job applicants.

You would be surprised how much your past experience will effect your ability to land a subsequent job. While you are sitting in that uncomfortable chair, sweating it out as your interviewer looks over your application, he or she, after skimming over your academic accomplishments, moves right down to the work experience section. While a consistent job record in the past signifies that prior employers received favorable signals about your abilities, periods of unemployment are attributed to the fact that previous potential employers chose not to hire you. “Thus, an applicant who receives good offers in the beginning of her career can become a “star” whereas a bad start without good job offers can make subsequent employers unwilling to hire a worker. In this sense, information cascades may dominate a worker’s career.”

In an interview, you give a potential employer a signal, either positive or negative. Furthermore, an employer, based on your resume, can see if previous employers chose to accept or reject you as an applicant. In this way, the information cascades discussed in this paper are exactly the same as those discussed in class; the only difference is that in the real world, several other factors come into play. This paper, through a payoff analysis, also discusses the optimal choices of an employer and an applicant. Some of the findings discuss how re-employment probability depends negatively on the duration of unemployment. However, “the main new feature of this paper is the introduction of endogenous signal qualities, leading to an asymmetry in the occurrence of successful and unsuccessful employment histories.”

In conclusion, after several pages of mathematical proofs and payoff matrixes, it was shown that after receiving two positive feedbacks from past employers, the third is much more likely to hire you without solely relying on your interview signal . That is not to say that an interview won’t ruin things, but past experience weighs much more heavily in your favor of finding a job. Though these findings seem pretty commonsensical, only after learning about information cascades did I truly appreciate the worldly effects and applications of such theories. The mathematical proofs and conclusions found in this paper reinforce what my parents always said, which was to “get ahead in the beginning” and “let your hard work payoff as life goes on.”