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Strike Activity and Bertrand vs Cournot Competition

Author

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  • MAULEON, Ana

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); UNIVERSITY THE BASQUE COUNTRY (Spain))

  • VANNETLEBOSCH, Vincent J.

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; Belgian National Fund for Scientific Research (FNRS))

Abstract

We develop a model of wage determination with private information in a unionized imperfectly competitive industry. Under two different bargaining structures (firm-level vs industry-level), we investigate the effects of the degree of product differentiation and the type of market competition (Bertrand vs Cournot competition) on the negotiated wage and the strike activity. If the wage bargaining takes place at the industry-level, then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition. However, if the wage bargaining takes place at the firm-level, then wages and strikes are increasing with the degree of product differentiation, and the strike activity is smaller under Bertrand than under Cournot competition.

Suggested Citation

  • MAULEON, Ana & VANNETLEBOSCH, Vincent J., 2001. "Strike Activity and Bertrand vs Cournot Competition," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2001011
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    References listed on IDEAS

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    More about this item

    Keywords

    Bertrand competition; Cournot competition; product differentiation; wage bargaining; strike activity;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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