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Bargaining Structures and Agendas in an Unconstrained Hotelling Model

Listed author(s):
  • Domenico Buccella

    ()

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

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.

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Article provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its journal Czech Economic Review.

Volume (Year): 8 (2014)
Issue (Month): 3 (December)
Pages: 149-167

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Handle: RePEc:fau:aucocz:au2014_149
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  1. Tabuchi, T. & Thisse, J.-F., "undated". "Asymetric equilibria in spatial competition," CORE Discussion Papers RP 1151, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  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. 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.
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  17. 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.
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  19. 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.
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