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Employee Poaching: Why It Can Be Predatory
Author(s) -
Kim JinHyuk
Publication year - 2014
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2637
Subject(s) - poaching , duopoly , competitor analysis , damages , payment , predatory pricing , business , economics , quality (philosophy) , outcome (game theory) , microeconomics , marketing , ecology , cournot competition , finance , monopoly , law , philosophy , epistemology , political science , wildlife , biology
There is a growing concern over predatory hiring practices that are aimed at eliminating competitors. Using a duopoly model in which firm's profits depend on the quality of the worker–employer match, this paper studies the conditions under which predatory equilibrium exists. I find that predatory hiring can occur when the match between the worker and the new employer is relatively poor, and the old employer has a shallow pool of replacement candidates. Post‐employment lawsuits do not affect the range of predatory equilibrium if the parties take into account expected damages payment. Copyright © 2013 John Wiley & Sons, Ltd.