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Competing for talents

Author

Listed:
  • Damiano, Ettore
  • Li, Hao
  • Suen, Wing

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.

Suggested Citation

  • Damiano, Ettore & Li, Hao & Suen, Wing, 2012. "Competing for talents," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2190-2219.
  • Handle: RePEc:eee:jetheo:v:147:y:2012:i:6:p:2190-2219 DOI: 10.1016/j.jet.2012.09.002
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Jan Eeckhout, 2012. "Matching Information," 2012 Meeting Papers 835, Society for Economic Dynamics.
    3. Ghazala Azmat & Marc Möller, 2016. "The Distribution of Talent across Contests Feedback in Higher Education," Working Papers 789, Queen Mary University of London, School of Economics and Finance.
    4. John Morgan & Dana Sisak & Felix Vardy, 2015. "The Ponds Dilemma," CESifo Working Paper Series 5539, CESifo Group Munich.
    5. Linnemer, Laurent & Visser, Michael, 2016. "Self-selection in tournaments: The case of chess players," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 213-234.

    More about this item

    Keywords

    Peer effect; Resource distribution; Sorting; Organization competition;

    JEL classification:

    • 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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