IDEAS home Printed from https://ideas.repec.org/a/fau/aucocz/au2014_149.html
   My bibliography  Save this article

Bargaining Structures and Agendas in an Unconstrained Hotelling Model

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://auco.cuni.cz/mag/article/download/id/162/type/attachment
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lambertini, Luca, 1997. "Unicity of the equilibrium in the unconstrained Hotelling model," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 785-798, November.
    2. 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.
    3. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July.
    4. Milliou, Chrysovalantou & Petrakis, Emmanuel, 2007. "Upstream horizontal mergers, vertical contracts, and bargaining," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 963-987, October.
    5. Naylor, Robin A., 2002. "Industry profits and competition under bilateral oligopoly," Economics Letters, Elsevier, vol. 77(2), pages 169-175, October.
    6. Henrick Horn & Asher Wolinsky, 1988. "Bilateral Monopolies and Incentives for Merger," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 408-419, Autumn.
    7. John T. Addison & Claus Schnabel (ed.), 2003. "International Handbook of Trade Unions," Books, Edward Elgar Publishing, number 2705.
    8. Joaquín Andaluz, 2011. "Validity of the “Principle of Maximum Product Differentiation” in a unionized mixed-duopoly," Journal of Economics, Springer, vol. 102(2), pages 123-136, March.
    9. repec:bla:ausecp:v:38:y:1999:i:3:p:259-75 is not listed on IDEAS
    10. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    11. Juan Bárcena-Ruiz & F. Casado-Izaga, 2008. "Timing of endogenous bargaining over costs and firms’ locations," Journal of Economics, Springer, vol. 95(2), pages 149-166, November.
    12. Dobson, Paul W, 1997. "Union-Firm Interaction and the Right to Manage," Bulletin of Economic Research, Wiley Blackwell, vol. 49(3), pages 213-229, July.
    13. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 1995. "Asymmetric equilibria in spatial competition," International Journal of Industrial Organization, Elsevier, vol. 13(2), pages 213-227.
    14. Svejnar, Jan, 1982. "On the theory of a participatory firm," Journal of Economic Theory, Elsevier, vol. 27(2), pages 313-330, August.
    15. Arijit Mukherjee, 2010. "Product Market Cooperation, Profits and Welfare in the Presence of Labor Union," Journal of Industry, Competition and Trade, Springer, vol. 10(2), pages 151-160, June.
    16. Dowrick, Steve, 1989. "Union-Oligopoly Bargaining," Economic Journal, Royal Economic Society, vol. 99(398), pages 1123-1142, December.
    17. Bughin, Jacques, 1999. "The strategic choice of union-oligopoly bargaining agenda," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 1029-1040, October.
    18. McAfee, R Preston & Schwartz, Marius, 1994. "Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity," American Economic Review, American Economic Association, vol. 84(1), pages 210-230, March.
    19. Brekke, Kurt R. & Straume, Odd Rune, 2004. "Bilateral monopolies and location choice," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 275-288, May.
    20. Thomas Grandner, 2010. "A Note On Product Differentiation In A Linear City And Wage Bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 62(4), pages 407-416, October.
    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


    Cited by:

    1. Kopel, Michael & Petrakis, Emmanuel & Ressi, Anna, 2019. "Endogenous scope of firm-union bargaining with vertical pay comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 39-52.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Symeonidis, George, 2010. "Downstream merger and welfare in a bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 230-243, May.
    2. Domenico Buccella, 2014. "Product market competition with differentiated goods and social welfare in the presence of an industry-wide union," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 13(2), pages 131-140, August.
    3. Domenico Buccella & Luciano Fanti, 2022. "Downstream competition and profits under different input price bargaining structures," Journal of Economics, Springer, vol. 136(3), pages 251-268, August.
    4. Domenico Buccella, 2015. "Unionized duopoly, market competition with differentiated products, and welfare," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(4), pages 455-473, December.
    5. Fanti, Luciano & Buccella, Domenico, 2015. "Bargaining agenda, timing, and entry," MPRA Paper 64089, University Library of Munich, Germany.
    6. Brekke, Kurt R. & Straume, Odd Rune, 2004. "Bilateral monopolies and location choice," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 275-288, May.
    7. Alberto Iozzi & Tommaso Valletti, 2014. "Vertical Bargaining and Countervailing Power," American Economic Journal: Microeconomics, American Economic Association, vol. 6(3), pages 106-135, August.
    8. Buccella Domenico & Fanti Luciano, 2019. "Profits Under Centralized Negotiations: The Efficient Bargaining Case," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(2), pages 1-8, June.
    9. George Symeonidis, 2008. "Downstream Competition, Bargaining, and Welfare," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 247-270, 03.
    10. Kitamura, Hiroshi & Matsushima, Noriaki & Sato, Misato, 2018. "Exclusive contracts with complementary inputs," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 145-167.
    11. Luciano Fanti & Domenico Buccella, 2017. "Bargaining agenda in a unionised monopoly with network effects: when corporate social responsibility may be welfare-reducing," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 471-489, December.
    12. Matsushima, Noriaki & Mizuno, Tomomichi, 2013. "Vertical separation as a defense against strong suppliers," European Journal of Operational Research, Elsevier, vol. 228(1), pages 208-216.
    13. Leonard F. S. Wang & Domenico Buccella, 2020. "Location decision of managerial firms in an unconstrained Hotelling model," Bulletin of Economic Research, Wiley Blackwell, vol. 72(3), pages 318-332, July.
    14. Alipranti, Maria & Milliou, Chrysovalantou & Petrakis, Emmanuel, 2014. "Price vs. quantity competition in a vertically related market," Economics Letters, Elsevier, vol. 124(1), pages 122-126.
    15. Michael Polemis & Konstantinos Eleftheriou, 2018. "To Regulate Or To Deregulate? The Role Of Downstream Competition In Upstream Monopoly Vertically Linked Markets," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 51-63, January.
    16. Fanti, Luciano & Meccheri, Nicola, 2014. "Profits and competition under alternative technologies in a unionized duopoly with product differentiation," Research in Economics, Elsevier, vol. 68(2), pages 157-168.
    17. Naylor, Robin & Soegaard, Christian, 2014. "The Effects of Entry in Oligopoly with Bargained Wages," Economic Research Papers 270239, University of Warwick - Department of Economics.
    18. Mauleon, Ana & Vannetelbosch, Vincent, 2010. "Market integration and strike activity," Journal of International Economics, Elsevier, vol. 81(1), pages 154-161, May.
    19. Takeshi Ebina & Noriaki Matsushima, 2017. "Product differentiation and entry timing in a continuous-time spatial competition model with vertical relations," ISER Discussion Paper 1009, Institute of Social and Economic Research, Osaka University.
    20. Dobson, Paul W. & Waterson, Michael, 2007. "The competition effects of industry-wide vertical price fixing in bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 935-962, October.

    More about this item

    Keywords

    Spatial competition; bargaining; firms’ locations; unionized oligopoly;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:aucocz:au2014_149. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lenka Stastna (email available below). General contact details of provider: https://edirc.repec.org/data/icunicz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.