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In game theory territory, no company's best response is to stick to publicly posted salary ranges. Suppose that you are among the top performing workers in the
by nequo 4y ago
In game theory territory, no company's best response is to stick to publicly posted salary ranges.
Suppose that you are among the top performing workers in the labor market. If you have two job offers, you could get those two companies to match each other's offers.
Each of the two company's best response is to match the other's offer to the point at which their offer is exactly equal to the value that you would bring to them. At that point, your net value to them is exactly zero, and beyond that, your net value is negative. So the highest salary that you can get is the value that you would produce for the company where you would be the second most productive.
If either company tries to stick to the publicly posted salary ranges even though you would bring them more value than that, then they are forgoing profits and not following their equilibrium best response.
- ghaff 4y agoAnd yet collusion has happened in Big Tech.
- nequo 4y agoIt did. That was a cooperative equilibrium in which they could share their gains from offering you a lower salary. In a non-cooperative equilibrium, they cannot share their gains so their best response is to match competing offers.
- doktorhladnjak 4y agoYeah, and it was blown up when Facebook refused to play ball. They wanted to hire more engineers. They paid more and didn’t restrict where they recruited.