Question
Citizens of a given country belong to two categories which are indistinguishable for the employer: the more- and less-talented. All of them finish university studies,
Citizens of a given country belong to two categories which are indistinguishable for the employer: the more- and less-talented. All of them finish university studies, however not all of them with distinction. Acquiring a diploma with distinction costs $100,000 for the less-talented persons and $50,000 fr the more-talented ones (involving e.g. effort, private lessons, bribes, etc.) (value calculated for the moment of obtaining the first salary). University alumni sign a contract for an indefinite period envisaging a costant annual salary and discount it based on the 10% annual discount rate. There are no possibilities of promotion. Independently of the obtained diploma and talents, each alumni may take up a job for a market salary of $40,000 per year. A certain company would like to employ only more-talented employees. What could its recruitment and wage policy look like?
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