Abstract
We study a labor market in which two identical firms compete over a pool of homogeneous workers. Firms pre-commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage (Bertrand) competition. Although firms are homogeneous, the unique pure-strategy equilibrium is asymmetric: one firm maximizes its outreach whereas the other compromises on a significantly smaller market share. The features of the asymmetric equilibrium extend to a general oligopsony with any finite number of firms.
Original language | English |
---|---|
Pages (from-to) | 38-59 |
Number of pages | 22 |
Journal | Scandinavian Journal of Economics |
Volume | 126 |
Issue number | 1 |
DOIs | |
State | Published - 1 Jan 2024 |
Keywords
- Asymmetric market power
- oligopsony
- outreach
- tacit collusion
ASJC Scopus subject areas
- Economics and Econometrics