Arbeitspapier
Externalities in Recruiting
According to the previous literature on hiring, ?rms face a trade-off when deciding on external recruiting: From an incentive perspective, external recruiting is harmful since admission of external candidates reduces internal workers’ career incentives. However, if external workers have high abilities hiring from outside is bene?cial to improve job assignment. In our model, external workers do not have superior abilities. We show that external hiring can be pro?table from a pure incentive perspective. By opening its career system, a ?rm decreases the incentives of its low-ability workers. The incentives of high-ability workers can increase from a homogenization of the pool of applicants. Whenever this effect dominates, a ?rm prefers to admit external applicants. If vacancies arise simultaneously, ?rms face a coordination problem when setting wages. If ?rms serve the same product market, weaker ?rms use external recruiting and their wage policy to offset their competitive disadvantage.
- Language
-
Englisch
- Bibliographic citation
-
Series: Bonn Econ Discussion Papers ; No. 02/2011
- Classification
-
Wirtschaft
Noncooperative Games
- Subject
-
Contest
externalities
recruiting
wage policy
Personalbeschaffung
Interner Arbeitsmarkt
Externer Effekt
Leistungsanreiz
Lohnpolitik
Wettbewerb
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Kräkel, Matthias
Lammers, Frauke
Szech, Nora
- Event
-
Veröffentlichung
- (who)
-
University of Bonn, Bonn Graduate School of Economics (BGSE)
- (where)
-
Bonn
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kräkel, Matthias
- Lammers, Frauke
- Szech, Nora
- University of Bonn, Bonn Graduate School of Economics (BGSE)
Time of origin
- 2011