Exactly. There's a difference between an difficult and awkward conversation that goes "Sorry B, A is better than you at writing code", but that's different from "Sorry B, A is honestly a worse coder than you across the board, but they negotiated a bit better at the start, so we pay them more."

In the job market, it’s mostly a matter of labor supply. If you really need people, and they demand $[x], you pay it or you don’t get an employee.

This only works for the people with the awareness and confidence to know what they’re worth. Even selecting for that small subset of the population, it’s still sometimes difficult to ascertain what the optimal salary is in any given environment. The issue is, the labor supply and its cost is known by the employer, but is largely hidden to the laborer.