Salary auctions and matching as incentives for recruiting to positions that are hard to fill in the Norwegian Armed Forces

Abstract

A significant number of positions in the Norwegian Armed Forces that are open for assignment are not filled because they do not receive any qualified applicants. Over the last five years, over 30 percent of the announced job vacancies have been unfilled. This thesis explores two different areas of research to help remedy this

auction theory and assignment market mechanisms. Auction and assignment market theory and practice are examined to reveal how these mechanisms might provide incentives and improve the quality of military assignments. This research finds that both of these mechanisms fall short when used independently. Auction theory is problematic when both sides of the market have preferences over the outcome

assignment models are problematic when there are system level concerns about which jobs remain unfilled. This thesis introduces a hybrid solution, containing elements of both auction theory and assignment markets, which has the potential to improve the current matching process. This research improves our knowledge and understanding about both of these research areas, and their interactions.