Competition and Screening with Skilled and Motivated Workers

Barigozzi, Francesca ; Nadia, Burani (2014) Competition and Screening with Skilled and Motivated Workers. Bologna: Dipartimento di Scienze economiche, p. 43. DOI 10.6092/unibo/amsacta/4046. In: Quaderni - Working Paper DSE (953). ISSN 2282-6483.
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Abstract

We study optimal contracts offered by two firms competing for the exclusive services of one worker, who is privately informed about her ability and her motivation. Firms differ both in their production technology and in the mission they pursue and a motivated worker is keen to be hired by the mission-oriented firm. We find that the matching of worker types to firms is always Pareto-efficient. When the difference in firms’ technology is high, only the most efficient firm is active. When the difference is not very high, then agent types sort themselves by motivation: the mission-oriented firm hires motivated types and the profit-oriented firm employs non-motivated ones, independently of ability. Effort provision is higher when the worker is hired by the mission-oriented firm, but a compensating wage differential might exist: the motivated worker is paid less by the mission-oriented firm. Such an earnings penalty is driven entirely by motivation, is increasing in ability and is associated to low power of incentives.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Barigozzi, Francesca
Nadia, Burani
Keywords
vocational labor market, multi-principals, bidimensional screening, intrinsic motivation, skills
Subjects
ISSN
2282-6483
DOI
Deposit date
10 Jul 2014 15:21
Last modified
16 Mar 2015 14:57
URI

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