Author(s)

Gen Chen^1,2, Jun Tang²

¹School of Economics & Management, Wuhan University, Wuhan, China.
²School of Economics and Trade, Guangdong University of Finance and Economics, Guangzhou, China.

This paper discusses the corruptive action widespread in the organizations’ worker recruiting: favoritism and bribery. The managers of the firm are actually able to discern the type of the productivity of the job-seekers, but they utilize the information advantage through the two types of misconduct—favoritism and bribery, at the expense of the profit share of the principal (the owner) and the workers’ wage rent. The key conclusion is drawn from this paper as follows: neither the intensity of favoritism nor the wage level matters in determining whether there’s profit or loss in the firm, whereas the key variable is the relative situation of exterior labor market.

Recruiting, Social Tie, Favoritism, Bribery

Chen, G. and Tang, J. (2015) Worker Recruiting with Favoritism and Bribery. Theoretical Economics Letters, 5, 415-424. doi: 10.4236/tel.2015.53048.