Optimal Compensation in Competitive Labor Markets with Heterogeneous Employers and Workers

Samuel Häfner, Niklas Haeusle, Winfried Koeniger and Alexander Braun

No 11488, CESifo Working Paper Series from CESifo

Abstract: We develop a model in which large risk-neutral firms and individual risk-averse consumers compete to employ heterogeneous workers by posting compensation menus. Production takes time, and we analyze how screening motives interact with the desire to smooth consumption. There is a unique symmetric separating equilibrium that is also efficient. In equilibrium, the extent to which the compensation scheme delays payment until the production quality becomes known depends on whether, and to which extent, the consumers are financially constrained. We discuss how our model relates to the design of compensation schemes in current online peer-to-peer markets.

Keywords: adverse selection; self selection; peer-to-peer markets; labor markets; capital market imperfections (search for similar items in EconPapers)
JEL-codes: D15 D82 D86 E24 J33 M52 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11488.pdf (application/pdf)

Related works:
Working Paper: Optimal Compensation in Competitive Labor Markets with Heterogeneous Employers and Workers (2024)
Working Paper: Optimal Compensation in Competitive Labor Markets with Heterogeneous Employers and Workers (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11488

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().