Sequential Search with Flexible Information

We consider a model of sequential search in which an agent (the employer) has to choose one alternative (a candidate) from a finite set. A key feature of our model is that the employer is not restricted to specific forms of information acquisition, i.e., she is free to endogenously choose any interview for each candidate that arrives. Our main characterization result shows that the employer’s unique optimal strategy is to offer a gradually easier interview to later candidates. Further, we study whether the candidates are treated equally in terms of the probability of being hired. We show that although the discrimination created by the order of consideration depends on the cost structure, for large numbers of candidates the first one will be generically favored. Finally, we characterize a wide range of cases where the employer prefers to start by interviewing ex ante worse candidates.