Centralization vs Decentralization in Hiring and Admissions

There is a range of ways to organize hiring and admissions in higher education, as in many domains, ranging from very centralized processes where a single person makes final decisions to very decentralized processes where many people make decisions about who to admit or hire. Decentralized processes can enable individual and collective empowerment, but this may come at the cost of efficiency. With the advent of automated decision making, this question of centralization has a big impact on hiring and admissions, given that automated systems often are easier to implement, or even require, more centralized decision making. In this paper, we develop a strategic model to explore the impact of the degree of centralization on both the candidates and the hirers, with a focus on university admissions. The model reflects a trade-off between a centralized committee where preferences may not capture individual hirers' preferences, and a decentralized process where individual hirers face extra costs to interview candidates themselves. We characterize when individual hirers prefer the decentralized process over the centralized process as a function of the degree to which the centralized process and hirers' preferences are aligned. We also show that decentralization can have devastating consequences for fairness, leading to major disparities in the likelihood of getting hired across candidates. Our results demonstrate the trade-offs that occur under the question of centralization vs decentralization, and point to how an answer to this question can impose significant harm to people in these systems.