Game Theory Case Info
Game Theory, Screening Devices, and the Case of Young Consulting
Karla Borja, The University of Tampa Ashley R. Burns, The University of Tampa
January 7, 2020
Strategy & General Management, Economics
game theory, screening devices, small business, employment contracts, behavioral economics, strategy under asymmetric information
Society for Case Research
Suzie Young was the owner and manager of Young Consulting Inc., a small, marketing services company located in Tampa, Florida. The mission of Young Consulting was to attend to the promotion and advertising needs of small businesses in the area by combining high-end technology and customer-centric principles. A customer-centric approach implies that all marketing and promotion strategies focus on enriching customer experiences and meeting the long-term goals of the firm. Suzie was in the process of hiring two marketing experts: One to be in charge of the technological tools, and a second to be responsible for customer care strategies. Both positions required similar academic backgrounds, but Suzie needed to recognize and assess empathy and care toward customers among the applicants in order to determine the candidates who would best fit her business’s mission. Suzie believed that if she chose and validated an effective screening strategy, she could use it to identify the most suitable employee for each position. How could she go about doing this, and what should her next steps be in testing, developing, and implementing such a strategy?
In completing this assignment, students should be able to: 1. Identify and discuss criteria for using a screening device model in the hiring process for new employees. 2. Calculate optimal screening device values to identify different types of job applicants. 3. Identify the assumptions that can alter outcomes from and recommendations for the use of screening device models. 4. Identify and compare different screening strategies for use by small businesses in hiring new employees. Application This case is most appropriate for use in undergraduate courses in game theory or graduate courses in economics, management of organizations, and small business strategy.