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dc.contributor.authorThisse, Jacques-Fran├žoisen_US
dc.contributor.authorToulemonde, Ericen_US
dc.description.abstractRecent empirical contributions in labor economics suggest that individual firms face upward sloping labor supplies. We rationalize this by assuming that diosyncratic non-pecuniary conditions interact with money wages in workers' decisions to work for specific firms. Likewise, firms supply differentiated goods in response to differences in consumer tastes. Hence, firms are price-makers and wage-setters. By combining monopolistic and monopsonistic competition, our setting encapsulates general equilibrium interactions between the two markets. The equilibrium involves double exploitation of labor. Compared to the competitive outcome, the high-productive workers are overpaid under free entry, whereas the low-productive workers are underpaid. In the same vein, capital-owners receive a premium, whereas workers are exploited.en_US
dc.publisherInstitute for the Study of Labor (IZA) Bonnen_US
dc.relation.ispartofseriesDiscussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5136en_US
dc.subject.keywordworker heterogeneityen_US
dc.subject.keywordmonopsonistic competitionen_US
dc.subject.keywordmonopolistic competitionen_US
dc.subject.keywordlabor exploitationen_US
dc.subject.keywordwage dispersionen_US
dc.titleThe distribution of earnings under monopsonistic/polistic competitionen_US
dc.typeWorking Paperen_US
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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