Job competition, product market competition and welfare

Alberto Pompermaier

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents a model of labour supply determination under job competition. In the presence of a positive rate of unemployment and increasing returns to labour, the level of labour supply chosen by each individual lies above the one that, at the offered wage, maximises utility. There is a unique strictly positive degree of job competition that is consistent with the optimal allocation. If labour supply is upward-sloping, increasing job competition raises the equilibrium level of activity and, when job competition causes production to exceed its optimal level, reducing output market competition leads to a welfare improvement.

Keywords: labour supply; job competition; welfare; product market competition (search for similar items in EconPapers)
JEL-codes: D43 D60 J22 (search for similar items in EconPapers)
Date: 2011-12-14
New Economics Papers: this item is included in nep-com, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/35410/1/MPRA_paper_35410.pdf original version (application/pdf)

Related works:
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:pra:mprapa:35410

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().