Monthly Archives: January 2014

Do job-seekers know how much competition they face?

In some matching models of the labor market, a source of friction is that job-seekers do not know how many other workers are also applying (or will apply) to a job. The job-seeker cannot condition their application decisions accordingly e.g., they can not easily skip jobs that are over-subscribed and/or seek out jobs where the competition is thinner.

I was curious whether job-seekers do know anything about the count of other candidates even after they apply to a job, and if they do know, how did they know. If they don’t know the count of applicants even for jobs they apply to—or they only learn during the process—then it seems unlikely they know the application counts for jobs they did not apply to. I ran a little survey on MTurk last night asking 50 people the following question:

“The last time you applied for a job, did you know how many other workers the firm was considering, and if so, how did you know?”


A little more than 40% of the respondents reported knowing anything about the count of other applicants. Of those that knew, their reasons fell into basically three buckets: (1) the interviewer told them, at 42% (2) a friend or associate at the firm told them, at 32% and (3) they inferred it from something they observed, such as seeing an interview list, overhearing a phone call etc., at 26%.

The usual caveats about convenience samples aside, in a majority of cases, job-seekers did now know the count and never learned it. Among those that did learn but were not told by the firm, social connections to existing employees mattered. These connections seem to grease the hiring process with information at multiple points. The additional fact that a substantial fraction reporting being able to infer the count is (perhaps unsurprising) evidence that job-seekers do care about the count and try to infer it from whatever sources available. The raw data as a CSV & my R code for analyzing it is at:

Free text Responses by MTurk Respondents

  • Yes, because it was through school and I knew the particular amount of interview spots that were open.
  • Yes the last time I applied for a job they were considering two people. My friend that work there told me.
  • The last time I tried to apply for a job, I did not know how many people the firm was considering since it was a blind interview.
  • No, I had no idea. The only indication was I was not told anything other than they had “several” other people to interview. “Several” could mean anything, although I doubt they would interview more than 10-15.
  • I had no idea how many candidates were being considered for the position. I was only aware that the position was available.
  • no, I had no idea.
  • Yes, I knew how many because associate conducting the interview mentioned that there were two other applicants coming in for interviews in the coming days so the final decision would not come for a few day afterwards.
  • I knew of at least 2 because I overheard the interviewer talking on the phone while I was waiting.
  • I went to to a group interview, so I saw all of the other applicants.
  • No, I didn’t know how many other workers were being considered. It was not an open job process at all. It was a job where there were only a small number of positions in my area, and lots of people who were qualified and who would want it–so I assumed there would be a lot of competition. (I didn’t get it.)
  • Yes, the last time I applied for a job, I knew how many other workers the firm was considering, because it was an internship opportunity in which there was an information session held beforehand that told us how many applicants would be considered.
  • i had no idea how many they were considering/wasn’t disclosed to me
  • I only new a rough estimate of around 10-20 and that info came from the interviewer.
  • No I did not know how many other workers were being considered.
  • No, I did not know. Applications and resumes were submitted in person or through fax, any number of people could have been considered.
  • I knew the place where I was hired was considering one other person because I was working there in a temporary capacity at the time and someone gave me inside information.
  • The last time I turned in an application for a job I had no idea how many others were considered.
  • The last time I applied for a job I did not know how many other workers they were considering hiring.
  • Yes, I knew that there was one other person that the firm was considering because the office manager who was interviewing me told me so at the end of the interview. The office manager ended up offering me the job several days later after all because that first choice person did not accept the job when it was offered to her.
  • 3
  • I did know, but only after I was at the interview. I was told by the hiring manager how many candidates there were.
  • The firm was considering two other workers. The reason that I knew was that I over heard the interviewers talking after I completed my interview and left them room.
  • I was applying for a bank teller job and in their wanted ad they stated they were looking for 4 positions to be filled.
  • i am currently interviewing and the interviewers have indicated that there are 2-3 other candidates.
  • no unfortunately i do know know
  • Don’t know. They never like to give exact numbers.
  • Yes, I knew how many others were being considered.
    I had an acquaintance at the firm who checked the list and told me.
  • yes, word of mouth from people who worked there.
  • I knew how many were applying because I knew one of the people who worked inside the company. He was a very close friend.
  • Yes, four others, they told me.
  • I was unsure of how many other workers the firm was considering.
  • There were about 25 that were invited back for a second interview. It was down to me and the daughter of a lady who already worked there. The mother was screening the calls to make sure no one got through to speak to the department head looking for a secretary hoping her daughter would get the job. It just so happened my call came while someone else was on the switchboard for a few minutes and was not in on the call blocking plan. Long story short, I got the job and worked there 25 years. It was a great job with great benefits. I found out when I was working with the payroll department doing W-2’s and came across the folder of applications for my job.
  • Yes. The guy who interviewed me told me how many other applicants there were.
  • I was not aware of how many others were being considered for the position.
  • Yes, I knew how many other people were being considered because I had a friend who worked for the company. He was able to find out how many other candidates there were and he told me.
  • I did not know how many other workers the firm was considering.
  • Yes I was working for the job and they were expending and hiring from within.
  • No.
  • I did not know how many others the company was considering.
  • Yes, I knew how many they were considering, as my 2nd cousin was in charge of the hiring process.
  • No, I didn’t know.
  • I applied for an accounting job, five people applied. I knew because I was friends with the HR director. I didn’t get the position.
  • I did not know how many other workers the firm was considering. I did know that there were other applicants, as I was told they had to “interview more people”, but that was the extent of my knowledge.
  • Yes, I knew. It was for a civil service position and when interviews were given out I was sent a packet showing mine and the other interviewee’s time slots. It was intimidating seeing how many people I was competing against. I would have rather not known.
  • No.
  • The last time I applied for a position, I was unsure how many candidates the firm considered. I had received notification of other candidates, but not a specific number.
  • No I did not know, but i would assume at least twenty others
  • I didn’t know how many other people were being considered.
  • I did not know an exact number of how many other workers were being considered, but the hiring manager did advise me that they had several interviews to complete and would contact me when they were finished.
  • NO, when I applied for my last job I had no clue how many others where applying.

Chinese freelancers on oDesk seem to avoid the number 4 in their proposed hourly rates

There are numerous examples of Chinese speakers avoiding the number “4” because it sounds like the Mandarin word for death; the Wikipedia page on “Tetraphobia” documents several examples. My NYU colleague Adam Alter recently published an article in the New Yorker discussing some of his work on how cultural beliefs can have economic and financial significance. After I read his article, I was curious whether Chinese freelancers on oDesk are less likely than expected to use the number 4 in their profiles. It seems like they are:


Note that we would expect different countries to “naturally” have different fractions of 4’s given that different countries tend to occupy different parts of the oDesk wage distribution. To make this plot, I took a sample of countries with at least as many freelancers as China.

Market Clearing Without Consternation?:
The Case of Uber’s “Surge” Pricing

The on-demand car service Uber has a “surge” pricing policy: during periods of peak demand, such as during snowstorms and on New Year’s Eve, prices have increased as much as 8x. Uber’s stated goal of the policy is to increase the supply of drivers and ensure that cars are still available. Although would-be riders know about the policy (and even have to confirm the fare multiplier on their iPhones), it has generated a great deal of mostly negative media attention. To many, dynamic pricing is just price gouging and immoral.

Uber’s CEO has argued that other companies practice dynamic pricing (e.g., hotels, airlines, clubs, etc.) and that Uber’s core, unwavering goal is to ensure that a car is always available. These justifications sound reasonable, but are they persuasive?

An MTurk experiment

I decided to test whether different “elaborations” such as the CEO’s can alter opinions about the morality of surge pricing. To do this, I created a series of HITs (human intelligence tasks) on Amazon Mechanical Turk. In each HIT:

  1. I first described how surge pricing worked and asked respondents to rate the policy on a five-point scale from “Very Wrong” to “Very Right.”
  2. I then had respondents read one of 18 “elaborations” that they were instructed to regard as true. Some of these elaborations were similar to claims made by the Uber CEO or his critics. Each elaboration was a separate HIT and respondents only considered one at at time.
  3. In response to the elaborations, respondents were asked to rate how this elaboration changed their baseline view, on five-point scale from “Much More Wrong” to “Much Less Wrong.”

Baseline views on the morality of surge pricing

As expected, a large chunk of respondents don’t like surge pricing:
Notes: For each bin, a 95% CI is shown for that proportion. The first response of each worker was used.

Do “elaborations” change views?

Price setting. Uber has been a bit opaque about how surge prices are actually arrived at. Given people’s taste for procedural justice and their tendency to view acts of omission and comission differently, I suspected that details about how the surge price was obtained would matter. I created three HITs related to price-setting:

  • “The actual surge price is set by an algorithm designed to make sure there is always a car available within a city within 20 minutes.”
  • “Uber lowers prices during periods of slack demand.”
  • “The actual surge price is set by Uber based on their guess about how much more demand there will be.”

In the figure below, we can see that the (tautological) statement that Uber lowers prices during periods of slack demand improves opinions substantially. Further, stating that the price was determined by an algorithm working against a liquidity contraint also strongly improved views. In contrast, stating that the price was made on the basis of a “guess” by Uber about likely demand made views much more negative.

Tighter parallelism between questions would be ideal, but I suspect that three factors made the “algorithm” perspective more persuasive: (1) with the algorithm, high prices were a byproduct rather than a goal, (2) moral agency is transferred from Uber employees to “the algorithm” and (3) the phrasing “guess” implies a lack of care and diligence.

Notes:For each bin, a 95% CI is shown for that proportion. The red line shows the predicted proportions from a fitted ordered logistic regression model.

Competitive landscape. The CEO of Uber has repeatedly discussed how dynamic pricing is commonplace in other industries. I created three HITs about the strategies used by firms—two about Uber’s competitors and one about an industry that practices dynamic pricing:

  • “Hotels in the area also use “surge” pricing to meet increases in demand.”
  • “Uber has a number of competitors, and they also use surge pricing.”
  • “Uber has a number of competitors, and they do not use surge pricing.”

In the figure below, we can see that neither hotels nor competitors practicing dynamic pricing does much to improve opinions. However, the elaboration that Uber practices surge pricing when its competitors do not has a strongly negative effect: the distrbution of responses is very left-shifted toward even dimmer views. It would seem Uber’s best bet would be to hope Lyft starts their own surge pricing (oh look, they did).


Uber’s revenue. Other work looking at how individuals judge the morality of market actions has found that people view actions to increase already-positive profits differently from actions to “save” a company (Kahneman, Knetsch & Thaler, or KKT). The two revenue related elaborations were:

  • “Uber as a whole is losing money.”
  • “Uber as a whole has high profits.”

In the figure below, we can see that KKT result is strongly replicated: views are much more negative when Uber is profitable than when it is making money.

Miscellaneous. I tried a few other elaborations that do not fit neatly into a bucket:

  • “People needing cars had other alternatives during surge pricing, such as public transportation.”
  • “Uber has told users about the policy up-front and it is very clear to them what the price will be.”
  • “A majority of economists view this surge pricing as an efficient way to allocate scarce goods.”

We can see that all of these elaborations “work” in improving views. It seems Uber is wise to point out that transactions are entered into freely. This appears to be better than showing that alternatives existed (which also had a positive effect). The respondents were also surprisingly (to me, at least) open to the idea that expert opinion on pricing might change their views. Maybe this is a good idea…



There are several complexities that I elided over in this post. For example, there is the question of how repondent’s prior beliefs affect their willingness to change views (in short, people with negative initial views are less likely to be persuaded, but they have the same directional effects as people with positive views). If there’s interest, I’ll follow-up with some more details in a longer post. I’ll also share a repository with the code, data and experimental materials.