While U.S. legislation prohibits employers from sharing information about their employees' compensation with each other, companies are still allowed to acquire and use more aggregated data provided by third parties. Most medium and large firms report using this type of data to set salaries, a...

We study interfirm competition on a product market where effort decisions are delegated to the firms' workers. Intrafirm organization is captured by a principal-multiagent framework where firm owners implement alternative compensation schemes for the workers. We show that the value of delegation...