As mentioned, OSHA fines companies for unsafe workplaces. At the same time, the labor market also "fines" companies that give their workers dangerous jobs.
The fines of the marketplace are larger than the U.S. government's fines by about what factor: a factor of 10, of 100, of 1,000, or of 10,000? 6.
The director of human resources at ToyCo is hiring new engineers. She's got a stack of 250 applications, and she's going to do a little research. She sits down and does a little cyber-snooping on all 250, and she finds the following:
i. Of the 150 who have Facebook pages, 50 are holding a bottle of beer in their profile photo, and 100 aren't.
ii. Of the 100 who have their own Web sites, 20 have more than two typos.
iii. Of the 150 who have Facebook pages, 25 have at least two friends who have apparently spent time in prison, according to a quick check of public records.
a. Each of these are cases of sending bad signals. In each case, describe what you think these might be signals of.
b. In each case, is the bad signal 100% correct? For example, is every applicant with three or four typos on their personal Web site worse than every applicant with an error-free page?
c. In each case, is the bad signal probably better or probably worse than having no signal at all? In other words, should the bad signal get at least a little bit of weight in the balance if the HR director's only goal is to hire the best workers?