Munich Personal RePEc Archive

Employee Poaching: Why It Can Be Predatory

Kim, Jin-Hyuk (2013): Employee Poaching: Why It Can Be Predatory. Published in: Managerial and Decision Economics , Vol. 5, No. 35 (2014): pp. 309-317.


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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.

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