Advanced Search
MyIDEAS: Login to save this paper or follow this series

Do profits always decrease with decreasing product differentiation? A reversal result in a unionized duopoly

Contents:

Author Info

  • Luciano Fanti
  • Nicola Meccheri

Abstract

This paper aims at investigating if the conventional wisdom, that a decrease in the degree of product differentiation (which implies increasing competition) always reduces firms’ profits, remains true in a differentiated duopoly model with decentralized, or firm-specific, monopoly unions. In this context, when product differentiation decreases, an important effect, termed “endogenous” or “union wage effect”, adds to the standard competition effect in affecting profits. Moreover, the union wage effect operates against the competition effect and, provided that unions are sufficiently wage-oriented, that is, they sufficiently prefer wages to employment, can actually reverse the conventional result under both Cournot and Bertrand competition. However, this is more likely to occur under competition à la Cournot.

Download Info

If 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.
File URL: http://www.dse.ec.unipi.it/fileadmin/pdf/2011-112.pdf
Our checks indicate that this address may not be valid because: 500 Can't connect to www.dse.ec.unipi.it:80 (10060). If this is indeed the case, please notify ()
Download Restriction: no

Bibliographic Info

Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2011/112.

as in new window
Length:
Date of creation: 02 Jan 2011
Date of revision:
Handle: RePEc:pie:dsedps:2011/112

Contact details of provider:
Postal: Via Cosimo Ridolfi, 10 - 56124 PISA
Phone: +39 050 22 16 466
Fax: +39 050 22 16 384
Email:
Web page: http://www.dse.ec.unipi.it
More information through EDIRC

Related research

Keywords: unionized duopoli; monopoly unions; product differentiation; profits;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. 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.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luciano Fanti, 2011. "Cross-ownership and unions in a Cournot duopoly: when profits reduce with horizontal product differentiation," Discussion Papers 2011/128, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pie:dsedps:2011/112. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

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.