Competing for talents (Q694731)

This article presents a model for competition of talents between organizations in the presence of the peer effect, which denotes that one organization may become more desirable than another in the presence of high quality colleagues. The article begins by modeling this as a three-stage game between two organizations, with a utility function that is linear to the average type of organization they join and the resource they receive in the organization. This is followed by an indirect method for finding the equilibrium and a proof that the produced equilibrium is unique under certain conditions. Finally, the authors explore the implications of the `raiding lemma', a key result in the model which determines the minimum resource budget needed by one organization to achieve any quality difference against any resource distribution schedule of the other organization.