Abstract
We investigate whether competition between two firms to hire managers with different abilities might affect efficiency in the product market, when a manager's effort is his/her private information. We conclude that competition for managers might lead to an improvement in efficiency in the market of the firm that attracts the most efficient manager. Competition for managers might even eliminate the productive efficiency loss due to the asymmetry of information in the firm-manager relationship.
| Original language | English |
|---|---|
| Pages (from-to) | 89-103 |
| Number of pages | 15 |
| Journal | Journal of Economics and Management Strategy |
| Volume | 7 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1998 |