The economics of exploding job market offers

I am hearing various Twitter reports that in the absence of AEA scheduling coordination, the junior economics job market is involving a lot of departments jumping the gun, interviewing early, and then making “exploding offers” with a short fuse, hoping to snap up desperate candidates.  I am not personally involved in that market this year, but my sources seem credible.  In any case, this is a problem worth thinking through.

As an economist, how should we think about exploding job market offers?

1. If you are a decently strong candidate who is highly risk-averse, you will end up with too low quality a job.  That said, the market is satisfying your risk-averse preference just as it does when you buy insurance.  And if you are so risk-averse, maybe your research record won’t be so important anyway, even if you manage to publish well.  I guess I am not that worried about these people.  I am happy enough to tax their risk-aversion, and in fact I suspect we should tax their risk-aversion all the more.

2. You might argue there are “thick market externalities,” and so it is efficient if most of the offers/trading occur closely bunched in time (see Niederle and Roth).  After all, many asset price markets have designated trading hours, rather than full blast trading 24/7.  While I find that analogy plausible, keep in mind what the efficiency here consists of, namely placing the more highly rated candidates in the more highly rated schools.  Is it so terrible if a “market inefficiency” shakes up that system a bit?  I thought the system was too elitist anyway.  Some would say “too white male patriarchical, etc.” anyway.  That is not exactly my view, but I agree that status quo ex ante methods were hardly sacrosanct.

2b. I am not one to trust a “managed intervention” into the previous job market methods more than a general disruption of trading.  Of course if you are an AEA elite leader, you might differ on this.

3. Private sector offers for economists are “always there,” as for instance Amazon and Uber are not locked into the same hiring schedule as academic departments are.  So at the margin these exploding offers will push more economists into the private sector.  I am fine with that, as arguably economists are currently excessively subsidized into academic institutions by government support.

4. Possibly the longer-term equilibrium is that everyone is pushed into acting in November, and perhaps with fewer flyouts.  I am not sure that is a bad option.  Is much extra, true information revealed between November and January?  If you are a good department and afraid of losing good candidates to exploding offers, can’t you just hurry up yourself?  That speed-up of the entire process also gives the secondary market, for those who did not get offers on the first round, more time to operate.  Surely there is room for the entire process to hurry up, yes?

4b. The more quickly the first tier of offers is cleared up, the more efficiently the queued candidates (say second or third in line for an offer) will be allocated.  Isn’t that important too?  For an egalitarian maybe more important?  And rapid, exploding offers may take some top candidates off the market more quickly, in a good way, and stop the places that have no chance at them from chasing after them and wasting time?

5. A speedier overall job market presumably would help the job candidates who are anti-procrastinators and hurt the candidates who are procrastinators.  I am fine with that!  On the offering side, maybe it would help private universities, which tend to be speedier, and hurt public universities?  YMMV.

6. Through the use of letters and phone calls and exclusivity norms, there has been a de facto preemptive market for the top schools for a long time.  And now others are jumping in early!?  Just exactly who is supposed to be fooled here?

7. What is the actual initial job market distortion we might want any change to address or improve?  Might it be that job market candidates are too “Top Five” oriented and too risk-averse?  I am genuinely unsure here.  But if that is the problem, I don’t see why having more exploding offers should be so terrible.

8. Aren’t a lot of the most important opportunities in your life to come similar to “exploding offers”?  Is it so terrible if you have to get used to this method early on?

9. If you really hate exploding offers, work on weakening the supposition that a candidate is not allowed to take one and then a month later “quit” and take another, better job.  Discussed here.

10. The best argument for a coordinated market is simply that it serves the interests of the top schools, and makes sure they get the best candidates, even the risk-averse ones.  Yet everyone is afraid to come out and make this explicitly elitist, anti-egalitarian, and so they resort to a lot of loose moralizing rhetoric (“ooh, it stresses people!” or “ooh, it’s unfair!”) that does not really befit how economists ought to be thinking about the problem.

Here are my earlier remarks on related issues.


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