Worker Self-Selection and the Profits from Cooperation
AbstractWe investigate a competitive labor market with team production. Workers differ in their motivation to exert team effort and types are private information. We show that there can exist a separating equilibrium in which workers self-select into different firms and firms employing cooperative workers make strictly positive profits. Profit differences across firms persist because cooperation strictly increases output and worker separation requires firms employing cooperative workers to pay out weakly lower wages.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3881.
Length: 13 pages
Date of creation: Dec 2008
Date of revision:
Publication status: published in: Journal of the European Economic Association, 2009, 7(2-3), 573 - 582
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Other versions of this item:
- Michael Kosfeld & Ferdinand A. von Siemens, 2009. "Worker Self-Selection and the Profits from Cooperation," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 573-582, 04-05.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-BEC-2009-01-03 (Business Economics)
- NEP-CTA-2009-01-03 (Contract Theory & Applications)
- NEP-LAB-2009-01-03 (Labour Economics)
- NEP-SOC-2009-01-03 (Social Norms & Social Capital)
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- Carpenter, Jeffrey P. & Seki, Erika, 2005. "Do Social Preferences Increase Productivity? Field Experimental Evidence from Fishermen in Toyama Bay," IZA Discussion Papers 1697, Institute for the Study of Labor (IZA).
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