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Shining with the stars: Competition, screening, and concern for coworkers' quality

Author

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  • Barigozzi, Francesca
  • Cremer, Helmuth

Abstract

We study how workers' concern for coworkers' ability (CfCA) affects competition in the labor market. Two firms offer nonlinear contracts to a unit mass of prospective workers. Firms may differ in their marginal productivity, while workers are heterogeneous in their ability (high or low) and their taste for being employed by any of the two firms. Workers receive a utility premium when employed by the firm hiring most high-ability workers and suffer a utility loss if hired by its competitor. These premiums/losses are endogenously determined.

Suggested Citation

  • Barigozzi, Francesca & Cremer, Helmuth, 2024. "Shining with the stars: Competition, screening, and concern for coworkers' quality," Games and Economic Behavior, Elsevier, vol. 144(C), pages 250-283.
    • Handle: RePEc:eee:gamebe:v:144:y:2024:i:c:p:250-283
    DOI: 10.1016/j.geb.2024.01.014
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    More about this item

    Keywords

    Concern for coworkers' quality; Competition; Screening; Sorting;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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