selection. Building on their framework we demonstrate that externalities between agents - an agent's utility upon accepting a … when the size of the externalities is arbitrarily small. Our result highlights the degree of control a principal has over …

create externalities among workers, since their utility upon accepting a contract depends on their team's performance and … therefore on their colleagues' productivity. We study the effects of such externalities in a competitive labor market if workers …-efficient separation of workers according to their productivity. We further find that externalities facilitate equilibrium existence, where …

selection. Building on their framework we demonstrate that externalities between agents - an agent's utility upon accepting a … when the size of the externalities is arbitrarily small. Our result highlights the degree of control a principal has over …