| Bryan Ellickson, University of California, Los Angeles Birgit Grodal, University of Copenhagen Suzanne Scotchmer, University of California, Berkeley William Zame, University of California, Los Angeles |
| A Theory of Firm Formation and Skills Acquisition |
| Session: C-1-23 Friday 11 August 2000 by Scotchmer, Suzanne |
| We present a theory of production that begins with an exogenously specified set of technologies, accessible to each potential firm. The technologies used in equilibrium are endogenous. Labor skills are differentiated, and the labor skills are acquired endogenously by workers, possibly by bearing private costs, and possibly by attending school. A technology can be used by a group of agents having the appropriate skills. We allow that workers care about the production plans in their firms, and will accept lower compensation to satisfy their preferences on production plans. In a continuum model, we show what price systems are required so that competitive equilibrium exists and core outcomes are equivalent to competitive outcomes. |
| Submitted paper full-text in .pdf |