Do you think that you are speaking as an engineer in this particular scenario? I read it that way, but i may be making inferences you did not intend. I’d like to recalibrate and take that lesson forward when reading posts of others.

In major league baseball, it’s now well established that value-above-replacement (wins above replacement in its usual statistical form) is the standard basis for free agent contracts. This basis is implicit rather than explicit, but it is now widespread for free agent contracts to be evaluated in terms of $ per WAR (really, $ per expected WAR). The point is, there is an actual, real, specific labor market that operates on that principle. There are a lot of caveats involved (the contract structure is collectively bargained and there are extremely high barriers to entry for new firms), but that’s the bottom line.

I would love to see a real labor economist attempt to analyze a more typical labor market from a value-over-replacement framework, and moreso to see what happens in a theoretical model with multiple labor markets operating on that principle with a common pool of potential labor.