A product-market theory of industry-specific training

Arbeitspapier

We develop a product market theory that explains why firms provide their workers with skills that are sufficiently general to be potentially useful for competitors. We consider a model where firms first decide whether to invest in industry-specific human capital, then make wage offers for each others' trained employees and finally engage in imperfect product market competition. Equilibria with and without training, and multiple equilibria can emerge. If competition is sufficiently soft and returns to the number of trained workers decrease sufficiently, firms may invest in non-specific training if others do the same, because they would otherwise suffer a competitive disadvantage or need to pay high wages in order to attract trained workers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 0610

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Firm Organization and Market Structure ; Legal Monopolies and Regulation or Deregulation ; Railroads and Other Surface Transportation
• Subject: industry-specific training ; human capital ; oligopoly ; turnover

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans ; Schmutzler, Armin
• Event: Veröffentlichung
• (who): University of Zurich, Socioeconomic Institute
• (where): Zurich
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/76169
• Last update: 10.03.2025, 11:43 AM CET