On the leading job board CareerBuilder.com, high-wage job postings unexpectedly attract fewer applicants, and this is the case even within a detailed occupation. Viewed through the lens of our directed search model, this negative relationship is indicative of substantial applicant heterogeneity within an occupation. Empirically, we find that job title heterogeneity is key: within a job title, jobs with 10% higher wages do attract 7.7% more applicants. Furthermore, our findings are consistent with a higher return to worker quality for hires in “manager” and “senior” job titles. Overall, our findings demonstrate the power of words in the matching process.

We study the effect of diminishing search frictions in markets with adverse selection by presenting a model in which agents with private information can simultaneously contact multiple trading partners. We highlight a new trade-off: facilitating contacts reduces coordination frictions but also the ability to screen agents’ types. We find that, when agents can contact sufficiently many trading partners, fully separating equilibria obtain only if adverse selection is sufficiently severe. When this condition fails, equilibria feature partial pooling and multiple equilibria co-exist. We show that facilitating contacts can lead to a reduction in welfare. In the limit, as the number of contacts becomes large, some of the equilibria converge to the competitive outcomes of Akerlof, including Pareto-dominated ones; other pooling equilibria continue to feature frictional trade in the limit, where entry is inefficiently high. Our findings provide a basis to assess the effects of recent technological innovations that have made meetings easier.