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...

We investigate whether competition between two firms to hire managers with different abilities might affect the product markets efficiency, when a manager's effort once hired is or her private information. We conclude that competition for managers might lead to an efficiency improvement in the...