eprintid: 43953 rev_number: 15 eprint_status: archive userid: 1482 importid: 105 dir: disk0/00/04/39/53 datestamp: 2021-11-09 13:20:11 lastmod: 2024-02-13 09:00:52 status_changed: 2024-02-13 09:00:52 type: monograph metadata_visibility: no_search creators_name: Barigozzi, Francesca creators_name: Cremer, Helmuth creators_idrefppn: 166363537 creators_idrefppn: 058485376 creators_affiliation: University of Bologna creators_affiliation: Toulouse School of Economics creators_halaffid: 1002422 title: Shining with the stars: competition, screening, and concern for coworkers' quality ispublished: pub subjects: subjects_ECO abstract: We study how workers’ concern for coworkers’ ability (CfCA) affects competition in the labor market. We consider two firms offering nonlinear contracts to a unit mass of prospective workers. Firms may differ in their marginal productivity, while workers are heterogeneous in their ability (high or low), and in their taste for being employed by any of the two firms. Workers receive a utility premium when employed by the firm hiring the workforce with larger average ability and they suffer a utility loss in the opposite case. These premiums/losses are endogenously determined. When workers’ ability is observable and the difference in firms’ marginal productivities is strictly positive, we show that CfCA increases surplus but it also increases firms’ competition for high-ability workers. As a result, CfCA benefits high-ability workers but is detrimental to firms. In addition, CfCA exacerbates the existing distortion in sorting of high-ability workers to firms: too many workers are hired by the least efficient firm. When ability is not observable, the additional surplus appropriated by high-ability workers is eroded by overincentivization (countervailing incentives) and the more so when CfCA is high. Conversely, high-types’sorting improves when CfCA is low and remains the same when it is high. date: 2021-11 date_type: published publisher: TSE Working Paper official_url: http://tse-fr.eu/pub/126143 faculty: tse divisions: tse keywords: Concern for Coworkers' Quality keywords: Competition keywords: Screening keywords: Sorting language: en has_fulltext: TRUE subjectsJEL: JEL_D82 subjectsJEL: JEL_L13 subjectsJEL: JEL_M54 view_date_year: 2021 full_text_status: public monograph_type: working_paper series: TSE Working Paper volume: 21-1257 place_of_pub: Toulouse, France pages: 51 institution: Université Toulouse 1 Capitole department: Toulouse School of Economics book_title: TSE Working Paper oai_identifier: oai:tse-fr.eu:126143 harvester_local_overwrite: department harvester_local_overwrite: pending harvester_local_overwrite: creators_idrefppn harvester_local_overwrite: institution harvester_local_overwrite: place_of_pub harvester_local_overwrite: pages harvester_local_overwrite: creators_halaffid oai_lastmod: 2024-02-12T13:37:06Z oai_set: tse site: ut1 citation: Barigozzi, Francesca and Cremer, Helmuth (2021) Shining with the stars: competition, screening, and concern for coworkers' quality. TSE Working Paper, n. 21-1257, Toulouse, France document_url: https://publications.ut-capitole.fr/id/eprint/43953/1/wp_tse_1257.pdf