Selection and Gratitude: Anonymity and gratitude

Abstract

What kind of candidate is selected into a job when the principal has to appoint a committee to measure the candidate's ability and select a winner through a call specifying a wage for the job? In a model where the principal fixes the wage anticipating the committee's choice, under a rather natural assumption about the committee's objective we find that if the committee takes into account the candidate's gratitude a candidate with less than first best ability will be selected in equilibrium. First best selection is achieved if the committee is anonymous to the candidates. If the committee could also set the wage the first best candidate would be selected, but the principal would be worse off hence he would not implement full delegation.