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Overlapping ownership in a unionized oligopoly

Author

Listed:
  • Gökhan Can

    (Università Cattolica del Sacro Cuore)

Abstract

This paper analyzes the effects of overlapping ownership in a unionized Cournot duopoly with decreasing returns to labor. Firms partially internalize rivals' profits, and wage rates are set by firm-level unions that maximize total wage bills. An increase in overlapping ownership always increases producer surplus but lowers total union utility through a reduction in equilibrium wage rates. When products are close substitutes, both consumer surplus and social welfare exhibit a U-shaped relationship with respect to the degree of overlapping ownership. By contrast, when products are not close substitutes, overlapping ownership lowers consumer surplus and social welfare.

Suggested Citation

  • Gökhan Can, 2025. "Overlapping ownership in a unionized oligopoly," Economics Bulletin, AccessEcon, vol. 45(3), pages 1441-1450.
    • Handle: RePEc:ebl:ecbull:eb-25-00179
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    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I3-P123.pdf
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    References listed on IDEAS

    as
    1. Luciano Fanti & Nicola Meccheri, 2011. "The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns," Economics Bulletin, AccessEcon, vol. 31(1), pages 233-244.
    2. Joseph Farrell & Carl Shapiro, 1990. "Asset Ownership and Market Structure in Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 275-292, Summer.
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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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