Abstract:
In the context of hiring for an innovative tech company, some proportion pp of the job applicants
is highly skilled, while the remaining (1−p)(1−p) lacks the necessary technical expertise. Let’s
assume p=0.40p=0.40.
The company values applicants with a recognized certification (e.g., in AI development). For
candidates holding this certification, the employer assumes high productivity and offers a salary of
$90,000. For those without certification, the employer must make an assumption based on
probabilities: they estimate the productivity of uncertified applicants as p=0.40p=0.40 and
unproductive applicants as 1−p=0.601−p=0.60.
The employer calculates the average productivity for uncertified candidates in dollars as:
Expected Salary=100,000⋅p+50,000⋅(1−p).Expected Salary=100,000⋅p+50,000⋅(1−p).
