The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly
AbstractThe paper examines the timing of endogenous wage setting under Bertrand competition in a unionized mixed duopoly. The results are that when the public firm chooses the timing of wage setting: (1) sequential wage setting is the outcome and (2) simultaneous wage setting is the outcome. The first result coincides with the choices of the private firm, its union, and the union of the public firm if imperfect substitutability is sufficiently large. This result is in contrast to the findings of prior literature. However, but the second result does not coincide between firms and their unions if imperfect substitutability is sufficiently small. However, simultaneous wage setting is more likely to improve the welfare if imperfect substitutability is sufficiently small. Furthermore, we find that the impact of sequential wage setting on the equilibrium path is lower in terms of improving welfare than the other outcome of sequential wage setting.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 20205.
Date of creation: 22 Jan 2010
Date of revision:
Endogenous Wage Setting; Bertrand Competition; Mixed Duopoly; Social Welfare.;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- 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
- H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-05 (All new papers)
- NEP-BEC-2010-02-05 (Business Economics)
- NEP-LAB-2010-02-05 (Labour Economics)
- NEP-MIC-2010-02-05 (Microeconomics)
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