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Job Matching, Competition and Managerial Incentives

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  • Kaniska Dam

    (Division of Economics, CIDE)

Abstract

When a manager's principal task is to organize production more efficiently, the intensity of the product market competition is crucial in determining the nature of firm-manager matching as well as the structure of managerial incentive. The firm-manager market is modeled as a two-sided matching game. If greater competition leads to increasing (decreasing) returns to cost-reduction, then a firm that faces more intense competition employs a manager with higher (lower) wealth, offers higher (lower) bonus and compensation, and has lower (higher) managerial slack. We further analyze the effects of entry on equilibrium matching and executive compensation.

Suggested Citation

  • Kaniska Dam, 2009. "Job Matching, Competition and Managerial Incentives," Working Papers DTE 460, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte460
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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE460.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Job Matching; Competition; Managerial Incentives;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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