Labour decreasing returns, industry-wide union and Cournot-Bertrand profit ranking. A note
AbstractWhile the received literature on unionized duopolies emphasized the key role of inter-union competition in reversing the standard Cournot-Bertrand profit ranking, in this paper such issue is studied in a framework with labour decreasing returns and a centralized (industry-wide) union, hence in a context where inter-union competition is clearly absent. Nevertheless, it is shown that the "reversal result" can apply provided that union is sufficiently wage oriented. Furthermore, it is pointed out that, in the special case of total wage bill maximization, it applies for a larger range of the degree of product substitutability under a central union rather than under firm-specific unions.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 1 ()
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unionized duopolies; industry-wide union; labour decreasing returns;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Luciano Fanti & Nicola Meccheri, 2010.
"The Cournot-Bertrand Profit Differential in a Differentiated Duopoly with Unions and Labour Decreasing Returns,"
Working Paper Series
36_10, The Rimini Centre for Economic Analysis.
- Luciano Fanti & Nicola Meccheri, 2011. "The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns," Economics Bulletin, AccessEcon, vol. 31(1), pages 233-244.
- Luciano Fanti & Nicola Meccheri, 2010. "The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns," Discussion Papers 2010/107, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- 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.
- 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.
- Luciano Fanti & Nicola Meccheri, 2013. "Non-rigid wages and merger profitability reversal under convex costs and centralised unionisation," Discussion Papers 2013/167, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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