Essays in industrial economics Labor market imperfections, cartel stability, and public interest cartels

This dissertation bundles three essays that contribute to a wider understanding of the measurement, consequences, and prevention of market imperfections. The first essay introduces a method to measure the firm-level relation between the marginal revenue contribution of employees and their compensation. This method is applied to firm-level data on the Dutch economy over the years 2007 to 2018. Overcompensation of employees on the margin relative to their revenue contribution is related to under-compensation of materials suppliers on the margin, suggesting that input market imperfections on various input markets interact. The second essay compares the stability of collusive agreements in the first-price sealed-bid auction and the English auction in a laboratory experiment. Bidding rings are more often stable in the English auction, a finding suggested by theory but so far not reported in the empirical literature. The third essay investigates whether allowing firms to form voluntary agreements can increase their standard of corporate social responsibility. In a model of oligopolistic competition, it is shown that unless firms can benefit at the expense of consumers, voluntary agreements will not promote corporate social responsibility.