Using a representative establishment dataset, this paper analyzes the incidence of wage posting and wage bargaining in the matching process. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being characterized by wage posting....

We develop a model of competition for managerial talent in which firms asymmetrically learn about the ability of their managers. In equilibrium, firms poach talent from competitors, even in the absence of gains from trade. Our main result is that firms inefficiently chase lemons: some poached...

In this paper we allude to a novel role played by the non-linear income tax system in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. We show that an appropriate choice of the tax schedule enables the government to affect the wage...