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Unions and Wages in Public and Private Firms: A Game-Theoretic Analysis

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  • De Fraja, Giovanni

Abstract

This paper studies the effects of product market interaction between private and public (welfare maximizing) enterprises on the wage level agreed upon in the bargaining process of the two firms. It is shown that when a public firm interacts with a private competitor, it is more likely to pay higher wages than the private firm than when the two firms are independent monopolists. If the public firm were privatized, there would be a considerable increase in the wage paid by the private firm. The effects on the wage paid by the privatized firm are ambiguous. Copyright 1993 by Royal Economic Society.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 45 (1993)
Issue (Month): 3 (July)
Pages: 457-69

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Handle: RePEc:oup:oxecpp:v:45:y:1993:i:3:p:457-69

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Cited by:
  1. Christian Dustmann & Arthur Van Soest, 1997. "Wage structures in the private and public sectors in West Germany," Fiscal Studies, Institute for Fiscal Studies, vol. 18(3), pages 225-247, August.
  2. Choi, Kangsik, 2009. "Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly," MPRA Paper 17221, University Library of Munich, Germany.
  3. Natalia Pimenta Monteiro, 2004. "Using Propensity Matching Estimators To Evaluate The Impact Of Privatisation On Wages," Royal Economic Society Annual Conference 2004 61, Royal Economic Society.
  4. Kangsik, Choi, 2009. "Privatization, Government's Preference and Unionization Structure: A Mixed Oligopoly Approach," MPRA Paper 13028, University Library of Munich, Germany.
  5. Choi, Kangsik, 2008. "Comparing Cournot and Bertrand Competition in a Unionized Mixed Duopoly," MPRA Paper 15468, University Library of Munich, Germany, revised 27 May 2009.
  6. Laszlo Goerke, 1998. "Privatization and efficiency wages," Journal of Economics, Springer, vol. 67(3), pages 243-264, October.
  7. Choi, Kangsik, 2010. "Strategic Budget Constraints of Public Firm under Bertrand Competition of Unionized Mixed Duopoly," MPRA Paper 19969, University Library of Munich, Germany.
  8. Stefan Lutz & Mario Pezzino, 2010. "Mixed oligopoly, vertical product differentiation and fixed quality-dependent costs," ICER Working Papers 08-2010, ICER - International Centre for Economic Research.
  9. Natália Pimenta Monteiro, 2004. "The impact of Privatisation on Wages: Evidence from the Portuguese Banking Industry," NIPE Working Papers 11/2004, NIPE - Universidade do Minho.
  10. Kangsik, Choi, 2008. "Cournot-Bertrand competition in a unionized mixed duopoly," MPRA Paper 12787, University Library of Munich, Germany, revised 26 Dec 2008.
  11. Choi, Kangsik, 2010. "The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly," MPRA Paper 20205, University Library of Munich, Germany.
  12. Orietta DESSY & Massimo FLORIO, 2004. "Workers' earnings in the UK before and after privatisation: a study of five industries," Departmental Working Papers 2004-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  13. Willner, Johan & Parker, David, 2002. "The Relative Performance of Public and Private Enterprise Under Conditions of Active and Passive Ownership," Centre on Regulation and Competition (CRC) Working papers 30591, University of Manchester, Institute for Development Policy and Management (IDPM).
  14. Choi, Kangsik, 2013. "Unionized Mixed Oligopoly and Privatization with Excess Burden of Taxation," MPRA Paper 51156, University Library of Munich, Germany.

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