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Bargaining Structures and Agendas in an Unconstrained Hotelling Model

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  • Domenico Buccella

    () (Kozminski University, Department of Economics, Warsaw, Poland)

Abstract

The present paper investigates the effects of bargaining structures and agendas on the quality differentiation/location in the final-goods market. The framework is a unionized duopoly industry in the context of an unconstrained Hotelling linear city model. The presence of labor union(s) and the bargaining processes (i.e., centralized vs. decentralized structure; right-to-manage vs. participatory framework agenda) change the locational incentives of the firms with respect to the case of exogenous production costs. The results reveal that the effect of centralization on the two bargaining agendas is diametrically opposed. More specifically, in the participatory framework, centralization is a centrifugal force, while it is a centripetal force in the right-to-manage. The social welfare consequences are also briefly discussed.

Suggested Citation

  • Domenico Buccella, 2014. "Bargaining Structures and Agendas in an Unconstrained Hotelling Model," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 8(3), pages 149-167, December.
  • Handle: RePEc:fau:aucocz:au2014_149
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    References listed on IDEAS

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    More about this item

    Keywords

    Spatial competition; bargaining; firms’ locations; unionized oligopoly;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • 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

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