Managerial Delegation under Alternative Unionization Structures
AbstractThis paper studies a three-stage duopoly game with managerial delegation and unions that can be either decentralized or industry-wide. Main findings point out the opposite role played by the introduction of managerial delegation according to the different nature of unionization structure. While under industry-wide union managerial delegation leads to incentives for sales, lower profits and higher consumer surplus as well as overall welfare, in the presence of decentralized unionization all those results are reversed unless unions are strongly employment-oriented. Moreover, introducing managerial delegation makes unionization structure neutral in relation to consumerâs surplus and overall efficiency. Finally, the timing of moves in the three-stage game proves to be important for obtaining the above qualitative results under decentralized unionization.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by CEIS in its journal LABOUR.
Volume (Year): 27 (2013)
Issue (Month): 1 (03)
Contact details of provider:
Postal: Via Columbia, 2 00133 Roma
Phone: 0039 06 2040234
Fax: 0039 06 2020687
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1121-7081
More information through EDIRC
Other versions of this item:
- Nicola Meccheri & Luciano Fanti, 2012. "Managerial delegation under alternative unionization structures," Discussion Papers 2012/138, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- Luciano Fanti & Nicola Meccheri, 2012. "Managerial Delegation under Alternative Unionization Structures," Working Paper Series 07_12, The Rimini Centre for Economic Analysis.
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pei‐Cheng Liao, 2010. "Strategic Delegation Under Unionised Duopoly: Who Will Bargain With Unions?," Australian Economic Papers, Wiley Blackwell, vol. 49(4), pages 276-288, December.
- Lopez, Monica Correa & Naylor, Robin A., 2004. "The Cournot-Bertrand profit differential: A reversal result in a differentiated duopoly with wage bargaining," European Economic Review, Elsevier, vol. 48(3), pages 681-696, June.
- Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
- Naylor, Robin, 1997.
"Union Wage Strategies and International Trade,"
The Warwick Economics Research Paper Series (TWERPS)
480, University of Warwick, Department of Economics.
- Mukherjee, Arijit & Pennings, Enrico, 2011.
"Unionization structure, licensing and innovation,"
International Journal of Industrial Organization,
Elsevier, vol. 29(2), pages 232-241, March.
- Mezzetti, C. & Dinopoulos, E., 1989.
"Domestic Unionization And Import Competition,"
337, California Davis - Institute of Governmental Affairs.
- Fershtman, Chaim & Judd, Kenneth L, 1987.
"Equilibrium Incentives in Oligopoly,"
American Economic Review,
American Economic Association, vol. 77(5), pages 927-40, December.
- Jensen, M.C. & Murphy, K.J., 1988.
"Performance Pay And Top Management Incentives,"
88-04, Rochester, Business - Managerial Economics Research Center.
- Nolan Miller & Amit Pazgal, 2002. "Relative performance as a strategic commitment mechanism," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(2), pages 51-68.
- Haucap, Justus & Wey, Christian, 2003.
"Unionization Structures and Innovation Incentives,"
CEPR Discussion Papers
4079, C.E.P.R. Discussion Papers.
- Justus Haucap & Christian Wey, 2004. "Unionisation Structures and Innovation Incentives," Discussion Papers of DIW Berlin 398, DIW Berlin, German Institute for Economic Research.
- Haucap, Justus & Wey, Christian, 2003. "Unionisation Structures and Innovation Incentives," Working Paper 21/2003, Helmut Schmidt University, Hamburg.
- Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
- Fumas, Vicente Salas, 1992. "Relative performance evaluation of management : The effects on industrial competition and risk sharing," International Journal of Industrial Organization, Elsevier, vol. 10(3), pages 473-489, September.
- Dowrick, Steve, 1989. "Union-Oligopoly Bargaining," Economic Journal, Royal Economic Society, vol. 99(398), pages 1123-42, December.
- Szymanski, Stefan, 1994. "Strategic delegation with endogenous costs : A duopoly with wage bargaining," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 105-116, March.
- Luciano Fanti & Nicola Meccheri, 2012. "Labour Incentive Schemes, Effort, and Market Outcomes in a Differentiated Duopoly with Simple Institutional Constraints," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(2), pages 290-310, June.
- Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-25, June.
- Zhao, Laixun, 2001. "Unionization, vertical markets, and the outsourcing of multinationals," Journal of International Economics, Elsevier, vol. 55(1), pages 187-202, October.
- Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-97, June.
- Arijit Mukherjee & Laixun Zhao, 2007. "Unionization Structure and the Incentives for Foreign Direct Investment," Discussion Paper Series 202, Research Institute for Economics & Business Administration, Kobe University.
- John H. Pencavel, 1982.
"The Trade-Off between Wages and Employment in Trade Union Objectives,"
NBER Working Papers
0870, National Bureau of Economic Research, Inc.
- Pencavel, John H, 1984. "The Tradeoff between Wages and Employment in Trade Union Objectives," The Quarterly Journal of Economics, MIT Press, vol. 99(2), pages 215-31, May.
- Pencavel, John, 1985. " Wages and Employment under Trade Unionism: Microeconomic Models and Macroeconomic Applications," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 197-225.
- Symeonidis, George, 2010.
"Downstream merger and welfare in a bilateral oligopoly,"
International Journal of Industrial Organization,
Elsevier, vol. 28(3), pages 230-243, May.
- George Symeonidis, 2009. "Downstream merger and welfare in a bilateral oligopoly," Economics Discussion Papers 671, University of Essex, Department of Economics.
- Lommerud, Kjell Erik & Straume, Odd Rune & Sorgard, Lars, 2005. "Downstream merger with upstream market power," European Economic Review, Elsevier, vol. 49(3), pages 717-743, April.
- Dowrick, Steve & Spencer, Barbara J, 1994. "Union Attitudes to Labor-Saving Innovation: When Are Unions Luddites?," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 316-44, April.
- Jansen, Thijs & van Lier, Arie & van Witteloostuijn, Arjen, 2007. "A note on strategic delegation: The market share case," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 531-539, June.
- Bughin, J., 1995. "Unions and strategic managerial incentives," Economics Letters, Elsevier, vol. 47(1), pages 95-100, January.
- Mónica Correa-López, 2007. "Price and Quantity Competition in a Differentiated Duopoly with Upstream Suppliers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 469-505, 06.
- Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July.
- Rupayan Pal & Bibhas Saha, 2008. "Union-oligopoly bargaining and entry deterrence: a reassessment of limit pricing," Journal of Economics, Springer, vol. 95(2), pages 121-147, November.
- Dhillon, Amrita & Petrakis, Emmanuel, 2002. "A generalised wage rigidity result," International Journal of Industrial Organization, Elsevier, vol. 20(3), pages 285-311, March.
- Luciano Fanti & Luca Gori, 2011. "A Note on Trade Unions, Unemployment Insurance, and Endogenous Growth," Eastern Economic Journal, Palgrave Macmillan, vol. 37(2), pages 270-280.
- Petrakis, Emmanuel & Vlassis, Minas, 2000. "Endogenous scope of bargaining in a union-oligopoly model: when will firms and unions bargain over employment?," Labour Economics, Elsevier, vol. 7(3), pages 261-281, May.
- Ana Mauleon & Vincent Vannetelbosch, 2006.
"Strategic union delegation and incentives for merger,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 13(1), pages 1-5.
- MAULEON, Ana & VANNETELBOSCH, Vincent J., . "Strategic union delegaion and inventives for merger," CORE Discussion Papers RP -1829, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fershtman, Chaim, 1985. "Managerial incentives as a strategic variable in duopolistic environment," International Journal of Industrial Organization, Elsevier, vol. 3(2), pages 245-253, June.
- Rupayan Pal & Bibhas Saha, 2008. "Union-Oligopoly Bargaining and Entry Deterrence:A Reassessment of Limit Pricing," Working Papers id:1375, eSocialSciences.
- Arjen van Witteloostuijn & Thijs Jansen & Arie van Lier, 2007. "Bargaining over managerial contracts in delegation games: managerial power, contract disclosure and cartel behavior," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 897-904.
- Thijs Jansen & Arie van Lier & Arjen van Witteloostuijn, 2009. "On the impact of managerial bonus systems on firm profit and market competition: the cases of pure profit, sales, market share and relative profits compared," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 141-153.
- Kurt R. Brekke, 2004. "Competition or Coordination in Hospital Markets with Unionised Labour," International Journal of Health Care Finance and Economics, Springer, vol. 4(1), pages 65-89, 03.
- Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 217-234, May.
- Luciano Fanti & Nicola Meccheri, 2014.
"Capacity choice and welfare under alternative unionisation structures,"
2014/176, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- Luciano Fanti & Nicola Meccheri, 2014. "Capacity Choice and Welfare under Alternative Unionisation Structures," Working Paper Series 12_14, The Rimini Centre for Economic Analysis.
- Nicola Meccheri & Luciano Fanti, 2012.
"Managerial Delegation Schemes in a Duopoly with Endogenous Production Costs: A Comparison of Sales and Relative Profit Delegation under Centralised Unionisation,"
Working Paper Series
44_12, The Rimini Centre for Economic Analysis.
- Nicola Meccheri & Luciano Fanti, 2012. "Managerial delegation schemes in a duopoly with endogenous production costs: a comparison of sales and relative profit delegation under centralised unionisation," Discussion Papers 2012/137, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.