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Social comparisons in oligopsony

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  • Goerke, Laszlo
  • Neugart, Michael

Abstract

Social comparisons matter for workers' valuation of their wage. The consequences of so- cial comparisons in imperfectly competitive markets are less well understood. We analyze an oligopsonistic model of the labor market where workers derive (dis-) utility from comparing their own wage with wages paid at other firms. As social comparisons become more preva- lent all wages rise, the wage distribution becomes more equal, and employment shifts to high productivity firms. Overall welfare increases.

Suggested Citation

  • Goerke, Laszlo & Neugart, Michael, 2017. "Social comparisons in oligopsony," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168095, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc17:168095
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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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