Strategic Wage Posting, Market Power, and Mismatch

Thomas Jungbauer

Journal of Labor Economics, 2026, vol. 44, issue 2, 481 - 514

Abstract: This paper analyzes the effects of firms posting multiple but varying numbers of vacancies, hence differing in their market power, in professional labor markets. I find that strategic wage posting does, in general, not result in an efficient assignment of workers to firms. This is because firms with a larger number of vacancies pay on average lower wages than their competitors due to a lack of within-firm rivalry. If highly productive firms hire more, the resulting welfare loss due to mismatch may be substantial. Moreover, I provide a potential explanation why firms post uniform wages, missing out on more skilled workers.

Date: 2026
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