Property Rights and Market : Employee Privatization as a Cooperative Bargaining Process
AbstractThe paper presents a game-theoretic model to investigate to what extent an employee privatization program of a State owned firm can be feasible under certain assumptions concerning the players' objective functions and the market structure in which the firm operates. The public managers are assumed interested in the firm's value, while the workers aim at maximizing the per capita surplus over the wage. The privatization process is then described as a bargaining process between the government in the role of core investor in the firm's physical assets and the workers of the firm, whose only asset is their personal skill. In the model the market structure in which the firm sells its product is assumed to he imperfectly competitive. After presenting the case of a monopolistic firm, the paper explores what happens if the firm plays a duopoly quantity game. The final section is devoted to introducing to the analysis an x-efficiency cost proportional to the public share of the ownership.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1996023.
Date of creation: 01 May 1996
Date of revision:
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More information through EDIRC
Privatization; Labour-Managed Firms; Bargaining;
Other versions of this item:
- Marco, Marini, 1996. "Property Rights and Market: Employee Privatization as a Cooperative Bargaining Process," MPRA Paper 31870, University Library of Munich, Germany.
- Marini, M., . "Property rights and market: employee privatization as a cooperative bargaining process," CORE Discussion Papers RP -1252, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
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- Svejnar, Jan, 1982. "On the theory of a participatory firm," Journal of Economic Theory, Elsevier, vol. 27(2), pages 313-330, August.
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3448675, Harvard University Department of Economics.
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- Dow, Gregory K, 1993. "Why Capital Hires Labor: A Bargaining Perspective," American Economic Review, American Economic Association, vol. 83(1), pages 118-34, March.
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