SECRET SEARCH

For high-profile positions, should applicant identities be made public within the organization (“open search”) or kept confidential (“secret search”)? We construct a model where an organization seeks to hire, but where candidates' abilities are private information unless it uses open search. Rejected applicants, under open search, suffer disutility. We find the following: Salaries are lower under secret search, the expected ability of applicants decreases as the posted (open search) salary increases, secret search is preferred by organizations where quality of candidate is relatively unimportant, and organizations will, for some parameter values, choose secret search even when open search is more efficient.