Effect of a recommendation letter on the communication during a job interview

Businesses place importance in finding the right employees for their company. The challenge is hiring the right person based on a brief first impression. An important aspect of the selection process is communication during the job interview. This thesis draws on the Cheap-Talk game, based on the models of Gibbons (1992) and of Crawford and Sobel (1982), to develop a model of strategic communication during the job interview. This thesis contributes to the literature by applying the aforementioned models to a job interview and by looking at the effect of a solution found in real-life, namely a recommendation letter. It is found that the communication during a job interview becomes richer when the Applicant exaggerates less. In addition, adding a recommendation letter gives a better fit for the job and could even give full revelation.