%0 Report
        %A Thisse, Jacques-François
%A Toulemonde, Eric
        %T The Distribution of Earnings under Monopsonistic/polistic Competition
        %D 2010
        %8 2010 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 5136
        %U https://www.iza.org/index.php/publications/dp5136
        %X Recent empirical contributions in labor economics suggest that individual firms face upward sloping labor supplies. We rationalize this by assuming that idiosyncratic non-pecuniary conditions interact with money wages in workers’ decisions to work for specific firms. Likewise, firms supply differentiated goods in response to differences in consumer tastes. Hence, firms are price-makers and wage-setters. By combining monopolistic and monopsonistic competition, our setting encapsulates general equilibrium interactions between the two markets. The equilibrium involves double exploitation of labor. Compared to the competitive outcome, the high-productive workers are overpaid under free entry, whereas the low-productive workers are underpaid. In the same vein, capital-owners receive a premium, whereas workers are exploited.
        %K wage dispersion
%K worker heterogeneity
%K monopsonistic competition
%K monopolistic competition
%K labor exploitation