Information disclosure and job search: evidence from a social networks experiment

Abstract

We report the results of an experiment that determined the importance of an information disclosure policy in job search behaviour. We controlled the level of employment information disclosed after every experimental round. When we announced the subjects’ wage levels, which at that point they had accepted along with their counterparts in a social network, the subjects’ average reservation wages increased significantly according to their initial preference. However, when this information was not revealed, the reservation wage remained the same despite the availability of the social network. We suggest that the green-eyed monster effect may be significant in explaining these results.

Keywords:

• information disclosure
• job search
• social network
• experiment

JEL Classification:

• D83
• J64

Notes

¹ See ‘Connections: An Introduction to the Economics of Networks’ by Goyal (2007).

² See a study by Beaman and Magruder (2012).

³ A treatment is a part of a session that is stored in a file. A ‘session’ refers to the events that occur in the time span between the arrival of the subjects and the moment they receive payment. In general, a session consists of several treatments. A set of corresponding sessions constitutes one experiment.