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Employee Poaching: Why It Can Be Predatory

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  • Jin‐Hyuk Kim

Abstract

There is a growing concern over predatory hiring practices that are aimed at eliminating competitors. Using a duopoly model in which firm's profits depend on the quality of the worker–employer match, this paper studies the conditions under which predatory equilibrium exists. I find that predatory hiring can occur when the match between the worker and the new employer is relatively poor, and the old employer has a shallow pool of replacement candidates. Post‐employment lawsuits do not affect the range of predatory equilibrium if the parties take into account expected damages payment. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Jin‐Hyuk Kim, 2014. "Employee Poaching: Why It Can Be Predatory," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(5), pages 309-317, July.
  • Handle: RePEc:wly:mgtdec:v:35:y:2014:i:5:p:309-317
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    References listed on IDEAS

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    1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-459, March.
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    3. Jasjit Singh & Ajay Agrawal, 2011. "Recruiting for Ideas: How Firms Exploit the Prior Inventions of New Hires," Management Science, INFORMS, vol. 57(1), pages 129-150, January.
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    7. Grossman, Sanford J. & Perry, Motty, 1986. "Perfect sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 39(1), pages 97-119, June.
    8. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
    9. Drew Fudenberg & Jean Tirole, 1986. "A "Signal-Jamming" Theory of Predation," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 366-376, Autumn.
    10. Jaeyong Song & Paul Almeida & Geraldine Wu, 2003. "Learning--by--Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?," Management Science, INFORMS, vol. 49(4), pages 351-365, April.
    11. BRYAN C. McCANNON, 2008. "Excessive Labour Raiding," Economica, London School of Economics and Political Science, vol. 75(297), pages 140-147, February.
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    1. repec:eee:jfinec:v:128:y:2018:i:2:p:266-286 is not listed on IDEAS

    More about this item

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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