Resumen de Job assignments as a screening device

Juan D. Carrillo

• We study intra-firm competition for promotions when the ability of the competing candidates is imperfectly observed. We show that firms should offer the jobs that require the highest degree of involvement to the candidates whose ability is known with least certainty (typically, juniors and outsiders) because these individuals have the strongest career-concern incentives to perform efficiently. Also, when firms have to delegate the selection of the screening procedure to their insider candidates, then the proportion of internal promotions relative to external hirings is excessively high.