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Managerial Delegation under Alternative Unionization Structures

  • Luciano Fanti
  • Nicola Meccheri

This paper studies a three-stage duopoly game with managerial delegation and (monopoly) unions that can be either decentralized or industry-wide. Main findings point out the opposite role played by the introduction of managerial delegation according to the different nature of unionization structure. Indeed, while under industry-wide union managerial delegation leads to incentives for sales, lower profits and higher consumer surplus as well as overall welfare, in the presence of decentralized (firm-specific) unions all those results are reversed. Moreover, and most importantly, introducing managerial delegation makes unionization structure neutral in relation to consumer’s surplus and overall efficiency.

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File URL: http://hdl.handle.net/10.1111/10.1111/labr.2013.27.issue-1
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Article provided by CEIS in its journal LABOUR.

Volume (Year): 27 (2013)
Issue (Month): 1 (03)
Pages: 38-57

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Handle: RePEc:bla:labour:v:27:y:2013:i:1:p:38-57
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