Bidding for teams

Benoit Julien, John Kennes and Moritz Ritter

Labour Economics, 2018, vol. 52, issue C, 68-73

Abstract: We develop a simple competing job auction model to study wages and employment within teams. If synergies favor larger teams, the basic competing job auction model predicts that workers are generally paid a wage less than their marginal product of labor and that there is too much entry of firms. We then extend the model to allow for workplace competition. In this case, the firms can also compete by a commitment to job amenities and a minimum scale of operation. We then find that wages are always equal to the marginal product of labor and entry of firms is efficient.

Keywords: Competing auctions; Directed search; Team production (search for similar items in EconPapers)
JEL-codes: D44 D83 E24 J31 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Bidding for Teams (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:52:y:2018:i:c:p:68-73

DOI: 10.1016/j.labeco.2018.04.001

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