Minimax regret and the job search

        

The minimax regret theory explains why my roommate searched for a job this fall even though he had a good standing job offer. My roommate—call him John—loved the company at which he interned. They offered to hire him after he graduates. When he came back this fall, John had to decide whether or not to recruit at different companies in hopes of getting a job at a company he liked even more than his summer offer. John’s choices were C1) recruit or C2) don’t recruit. His potential states were S1) Could get a better job and 2) Could not get a better job.

Since John didn’t discount options by their probabilities, he thought that the benefit of a potential new job outweighed the cost of recruiting (including writing cover letters, tinkering with his resume, etc). John basically held out for a ‘unicorn’ job, one that he would absolutely love and which he wouldn’t be able to get without choosing to interview. The regret table below shows that someone choosing to live by the minimax regret theory would choose to recruit, just like John.

	Could not get a better job	Could get a better job
Recruits	Cost of recruiting	0
Does not recruit	0	Benefit of a new job - cost of recruiting