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The employer is imagined to have conditional chance assessments of productive ability, based upon past experience of your market, for every mixture of indices and signals.[clarification wanted] The employer updates These assessments on observing Every single staff’s characteristics.
describes the structure and overview in the technique, including the arrows indicating opportunity trades. The online video also has two case in point trades.
Michael Spence considers hiring as being a kind of investment below uncertainty, analogous to purchasing a lottery ticket, and refers back to the characteristics of the applicant which can be observable into the employer as indices.
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