Sebastian Buhai, Stockholm University – SOFI

Paper: Rent-sharing and worker-firm specific investments

Abstract: We develop a microfounded theory of heterogeneous rent sharing within firms. Wages arise from sequential bilateral bargaining in a fixed queue, inside a dynamic firm facing idiosyncratic demand and endogenous investment in worker-specific knowledge. The protocol yields order-dependent wage shares: earlier bargainers appropriate larger gains from trade. We map these shares to the marginal value of specific human capital and characterize comparative statics in replacement frictions and bargaining patience.