Job search and information processing in the presence of nonrational behavior

Abstract Prospect theory is reviewed and used to analyze the job search decision. ‘Cancellation’ and ‘coding’ during the editing phase of the decision introduces systematic biases resulting in a mismatch between worker and job not predicted by expected utility theory. Cognitive dissonance and self-perception theory is used to analyze how adverse information received on the job can result in rationalization, or a change in tastes. As a consequence information does not provide the positive role usually assigned.