I think it's actually worse than that for the companies, in particular it can easily be a race to negative profits for all companies involved. For example, imag

I think it's actually worse than that for the companies, in particular it can easily be a race to negative profits for all companies involved. For example, imagine two competing bridges over a river, where the total revenue available is $100. Each bridge is built of 50 bricks, which collect salary and are free to work for whichever bridge gives them the better offer. The maximum salary that's sustainable if the bridges make a profit is $1 per brick, but it's worth offering vastly more than $1 to "bribe" any particular brick from the other bridge to defect since doing so causes your only competitor to fall down. Similarly, your competitor should rationally be willing to counter-offer up to their entire profit to any single brick to prevent that from happening. Subject to some assumptions about how negotiations work, this can result in both bridges being really far in the red, since the total value of the bridge/team is worth less than the sum of the costs of each individual brick/member departing. The decision theory concept of a "dollar auction" has some similar pathological behaviors. Obviously, software engineering teams aren't as dramatically interdependent as a bridge where the departure of any one member causes the entire structure to collapse, but they also don't live in the perfect balance where the value of the whole exactly equals the sum of the marginal value/cost of each member. As a result, there's no one number for the "value" of an individual engineer that both represents their negotiated wage and is viable for the company to pay without going bankrupt.