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Prot-Sharing, Bertrand Competition and Monopoly Unions: A Note

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  • Dhillon, Amrita
  • Petrakis, Emmanuel

Abstract

This paper studies a strategic aspect of prot-sharing in an oligopolistic industry with a monopoly union. Whenever a uniform prot share exists in the industry, we show that a union that values the per worker remuneration positively, may have incentives to reduce industry employment, decreasing thus total output and causing total prots to increase. Thus, we show that prot-sharing may lead to higher prots for such an industry even if productivity eects are absent.

Suggested Citation

  • Dhillon, Amrita & Petrakis, Emmanuel, 2001. "Prot-Sharing, Bertrand Competition and Monopoly Unions: A Note," Economic Research Papers 269382, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269382
    DOI: 10.22004/ag.econ.269382
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    Cited by:

    1. Domenico Buccella, 2016. "Profit sharing as entry deterrence mechanism," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 15(1), pages 17-31, April.

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    More about this item

    Keywords

    Financial Economics; Industrial Organization;

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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