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Job market signaling with imperfect competition among employers

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  • Daeyoung Jeong

    (POSTECH)

Abstract

This paper studies a job market signaling model with imperfect competition among employers. In our basic model, workers are differentiated in productivity and preference over employers, both of which are workers’ private information. We conclude that if competition is sufficiently strong, a separating equilibrium exists. We also show that stronger competition among employers intensifies competition between workers; workers invest more in costly education to get attractive jobs, and social welfare decreases. When employers can observe worker’s preferences, wage discrimination strengthens competition among employers and makes workers better off.

Suggested Citation

  • Daeyoung Jeong, 2019. "Job market signaling with imperfect competition among employers," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1139-1167, December.
    • Handle: RePEc:spr:jogath:v:48:y:2019:i:4:d:10.1007_s00182-019-00685-1
    DOI: 10.1007/s00182-019-00685-1
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    References listed on IDEAS

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    Cited by:

    1. Khan, Abhimanyu, 2022. "Market Power and Separating Equilibrium in Job Market Signaling," MPRA Paper 114957, University Library of Munich, Germany.

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    More about this item

    Keywords

    Signaling; Job market; Horizontal competition; Wage discrimination;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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