Asymmetric market power and wage suppression

Research output: Contribution to journalArticlepeer-review


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 languageEnglish
JournalScandinavian Journal of Economics
StateAccepted/In press - 1 Jan 2023


  • Asymmetric market power
  • oligopsony
  • outreach
  • tacit collusion

ASJC Scopus subject areas

  • Economics and Econometrics


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