This article explores human capital acquisition decisions when job placement helps determine competition for a worker. With asymmetric information, workers may invest in firm‐specific capital without long‐term contracts. Specific investment increases promotion chances (and hence wage competition), shifting competition back to a time when firms are symmetrically uninformed. If general human capital is the efficient (output‐maximizing) investment, then an equivalent firm‐specific investment maximizes expected career wages. This is a general result for sellers in second‐price auctions: sellers (of labor) invest to maximize the expected second‐highest bidder valuation (wage), not the winner's expected valuation.

This paper examines the strategic promotion and wage decisions of employers when employees may be more valuable to competing firms. Competing employers must incur a cost to learn the quality of their match with a manager. Promotion signals that workers are potentially valuable managers in other firms and so can lead to turnover. To preempt competition for a manager, an employer may offer a wage high enough to discourage competitors from acquiring information and bidding up the wage further or hiring the worker away. This transfers wages from good workers to bad. More costly information acquisition yields greater expected lifetime wages.