Competing for talents
AbstractTwo organizations compete for high quality agents from a fixed population of heterogeneous qualities by designing how to distribute their resources among members according to their quality ranking. The peer effect induces both organizations to spend the bulk of their resources on higher ranks in an attempt to attract top talents that benefit the rest of their membership. Equilibrium is asymmetric, with the organization with a lower average quality offering steeper increases in resources per rank. High quality agents are present in both organizations, while low quality agents receive no resources from either organization and are segregated by quality into the two organizations. A stronger peer effect increases the competition for high quality agents, resulting in both organizations concentrating their resources on fewer ranks with steeper increases in resources per rank, and yields a greater equilibrium difference in average quality between the two organizations.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 147 (2012)
Issue (Month): 6 ()
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Web page: http://www.elsevier.com/locate/inca/622869
Peer effect; Resource distribution; Sorting; Organization competition;
Other versions of this item:
- Ettore Damiano & Hao Li & Wing Suen, 2005. "Competing for Talents," Working Papers tecipa-220, University of Toronto, Department of Economics.
- Ettore Damiano & Hao Li & Wing Suen, 2006. "Competing for Talents," Departmental Working Papers _177, Chinese University of Hong Kong, Department of Economics.
- Damiano, Ettore & Li, Hao & Suen, Wing, 2006. "Competing for Talents," Microeconomics.ca working papers damiano-06-01-17-02-01-48, Vancouver School of Economics, revised 17 Jan 2006.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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