Labour market screening with intermediaries

Paul Schweinzer

We consider a Rothschild-Stiglitz-Spence labour market screening model and employ a centralised mechanism to coordinate the efficient matching of workers to firms. This mechanism can be thought of as operated by a recruitment agency, an employment office or head hunter. In a centralised descending-bid, multi-item procurement auction, workers submitwage-bids for each job and are assigned stable jobs as equilibrium outcome. We compare this outcome to independent, sequential hiring by firms and conclude that, in general, a stable assignment can only be implemented if firms coordinate to some extent.

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Year of publication:	2006
Authors:	Schweinzer, Paul
Publisher:	Mannheim [u.a.] : Sonderforschungsbereich/Transregio 15
Subject:	Matching \| Multi-item auctions \| Sequential auctions \| Screening \| Auktionstheorie \| Auction theory \| Auktion \| Auction \| Signalling \| Asymmetrische Information \| Asymmetric information \| Arbeitsmarkt \| Labour market