Prices are determined by replacement cost, not potential value. Google has a strong arbitrage opportunity because it can generate more dollars for the same wage

Prices are determined by replacement cost, not potential value. Google has a strong arbitrage opportunity because it can generate more dollars for the same wage as competing companies. While margins allow them to bid higher, the price will always be marginally higher from the second highest bidder. The point of the article is that, assuming equal employees, you are in fact saying that one has a higher economic value to the company based only on where they choose to live.