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Competing for Talents

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  • Ettore Damiano
  • Hao Li
  • Wing Suen

Abstract

Two 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 Info

Paper provided by Chinese University of Hong Kong, Department of Economics in its series Departmental Working Papers with number _177.

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Date of creation: Feb 2006
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Handle: RePEc:chk:cuhked:_177

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  4. Ettore Damiano & Hao Li & Wing Suen, 2010. "First In Village Or Second In Rome?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(1), pages 263-288, 02.
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Cited by:
  1. Jan Eeckhout, 2012. "Matching Information," 2012 Meeting Papers, Society for Economic Dynamics 835, Society for Economic Dynamics.
  2. Tomasz Kulisiewicz, 2013. "Redukcja obciążeń administracyjnych a wybrane zagadnienia informatyzacji administracji publicznej," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 29, pages 131-150.

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