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Worker Self-Selection and the Profits from Cooperation

Michael Kosfeld () and Ferdinand von Siemens

No 3881, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate a competitive labor market with team production. Workers differ in their motivation to exert team effort and types are private information. We show that there can exist a separating equilibrium in which workers self-select into different firms and firms employing cooperative workers make strictly positive profits. Profit differences across firms persist because cooperation strictly increases output and worker separation requires firms employing cooperative workers to pay out weakly lower wages.

Keywords: self-selection; team work (search for similar items in EconPapers)
JEL-codes: D82 D86 M50 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2008-12
New Economics Papers: this item is included in nep-bec, nep-cta, nep-lab and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Published in: Journal of the European Economic Association, 2009, 7(2-3), 573 - 582

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