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Vertical differentiation and labor market: the differentiation principle revisited

Author

Listed:
  • Amal Hili
  • Rim Lahmandi-Ayed

    (LEGI - Laboratoire d'Économie et de Gestion Industrielle [Tunis] - Ecole Polytechnique de Tunisie - UCAR - Université de Carthage (Tunisie) = University of Carthage)

  • Hejer Lasram

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

The labor market is introduced into the standard vertical differentiation model, linking increasingly the quality of the product and the effort necessary for workers to produce it. Surprisingly, when two firms compete on the product market but are monopolies on the labor market, at equilibrium they choose not to differentiate their products, which is different from the result obtained with standard vertical differentiation models.

Suggested Citation

  • Amal Hili & Rim Lahmandi-Ayed & Hejer Lasram, 2015. "Vertical differentiation and labor market: the differentiation principle revisited," Post-Print hal-01457404, HAL.
    • Handle: RePEc:hal:journl:hal-01457404
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    Cited by:

    1. Hend Ghazzai & Wided Hemissi & Rim Lahmandi-Ayed & Sana Kefi, 2020. "A Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences," Working Papers hal-02480175, HAL.
    2. Amani Kahloul & Rim Lahmandi-Ayed & Hejer Lasram & Didier Laussel, 2017. "Democracy and competition: Vertical differentiation and labor in a general equilibrium model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(4), pages 860-874, August.
    3. Hend Ghazzai & Wided Hemissi & Rim Lahmandi-Ayed & Sana Mami Kefi, 2021. "Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences," Revue d'économie politique, Dalloz, vol. 131(2), pages 249-261.
    4. Rabah Amir & Hend Ghazzai & Rim Lahmandi-Ayed, 2020. "On the Political Economy of Free Trade," Working Papers hal-02506064, HAL.

    More about this item

    Keywords

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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