The bit about expertise overlap is curious. After all, why hire someone that can eventually be your competition? Academia is viciously competitive on the inside and it just doesn't look rational.
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Another perspective on this is that departments will have a long term hiring strategy that balances breadth of the overall research program against depth in a particular subdiscipline, with the goal of building a coherent ecosystem with good opportunities for faculty and students. That may be a factor beyond a candidate's control, but not necessarily just anticompetitive behavior in the hiring process.