Job assignment, market power and managerial incentives

Kaniska Dam

The Quarterly Review of Economics and Finance, 2015, vol. 57, issue C, 222-233

Abstract: I study how product market conditions determine labor market outcomes in an economy where a continuum of heterogeneous firms compete for heterogeneous managers. The main objective of the paper is to establish how market power and managerial talent influence the incentive contracts. If firms with higher (lower) market power benefit more from managerial actions, then managerial talent has greater effects in such firms, and hence more talented managers are lured into firms with higher (lower) market power following a positively (negatively) assortative matching pattern. The equilibrium relationship between market power and managerial incentives is monotone if and only if the equilibrium matching is monotone.

Keywords: Firm–manager assignment; Market power; Managerial incentives (search for similar items in EconPapers)
JEL-codes: C78 D40 D82 J31 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:57:y:2015:i:c:p:222-233

DOI: 10.1016/j.qref.2014.11.001

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