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Would workers apply to better firms if they were more informed about firm quality?
Collaborating with 26 science-based startups, we create a custom job board and
invite business school alumni to apply. The job board randomizes across applicants
to show coarse expert ratings of all startups’ science and/or business model quality.
Making ratings visible strongly reallocates applications toward higher-rated firms. This
reallocation holds restricting to high-quality workers. Treatments operate in part by
shifting worker beliefs about firms’ right-tail outcomes. Despite these benefits, workers
make post-treatment bets indicating highly overoptimistic beliefs about startup
success, suggesting a problem of broader informational deficits.
