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Bidding for Talent: A Test of Conduct in a High-Wage Labor Market

Author

Listed:
  • Nina Roussille
  • Benjamin Scuderi

Abstract

We develop a procedure for adjudicating between models of firm wage-setting conduct. Using data from a U.S. job search platform, we propose a methodology to aggregate workers’ choices over menus of jobs into rankings of firms’ non-wage amenities. We use these estimates to formulate a test of conduct based on exclusion restrictions. Oligopsonistic models incorporating strategic interactions between firms and tailoring of wage offers to workers’ outside options are rejected in favor of monopsonistic models featuring near-uniform markdowns. Misspecification has meaningful consequences: our preferred model predicts average markdowns of 19.5%, while others predict average markdowns as large as 26.6%.

Suggested Citation

  • Nina Roussille & Benjamin Scuderi, 2025. "Bidding for Talent: A Test of Conduct in a High-Wage Labor Market," NBER Working Papers 33848, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33848
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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