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When do firms and unions agree on a monopoly union or an efficient bargaining arrangement?

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  • Luciano Fanti

Abstract

In this paper we investigate the effects of two popular labour market institutions - namely, Monopoly Union (MU) and Efficient Bargaining (EB) - in a Cournot duopoly, in particular as regards the issue of the bargaining agenda. We show that, while when EB and Right-to- Manage arrangements are considered no agreement on the scope of bargaining may occur, when exogenously given MU and EB arrangements are compared both firms and unions may find more convenient the MU institution. This occurs in particular when the value of the union's bargaining power is included in a "medium-high" range. However this result is not robust to the endogeneization of the scope of bargaining: indeed in the latter case both firms and unions agree with the choice of the EB arrangement for a sizable range of the union's power. Therefore the detection of a set of union bargaining power values for which there exists an agreement between firms and unions eitheron the MU institution in the case of exogenously given arrang ements or on the EB institution in the case of endogenously determined arrangement may be interesting also for policy purposes.

Suggested Citation

  • Luciano Fanti, 2014. "When do firms and unions agree on a monopoly union or an efficient bargaining arrangement?," Discussion Papers 2014/181, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  • Handle: RePEc:pie:dsedps:2014/181
    Note: ISSN 2039-1854
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    References listed on IDEAS

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    1. Luciano Fanti, 2014. "Union-Firm Bargaining agenda: Right-to manage or Efficient Bargaining?," Discussion Papers 2014/182, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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    6. Luciano Fanti & Nicola Meccheri, 2013. "Managerial Delegation under Alternative Unionization Structures," LABOUR, CEIS, vol. 27(1), pages 38-57, March.
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    10. Pencavel, John, 1985. " Wages and Employment under Trade Unionism: Microeconomic Models and Macroeconomic Applications," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 197-225.
    11. Luciano Fanti & Nicola Meccheri, 2011. "The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns," Economics Bulletin, AccessEcon, vol. 31(1), pages 233-244.
    12. Dowrick, Steve, 1989. "Union-Oligopoly Bargaining," Economic Journal, Royal Economic Society, vol. 99(398), pages 1123-1142, December.
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    Cited by:

    1. Luciano Fanti, 2014. "Union-Firm Bargaining agenda: Right-to manage or Efficient Bargaining?," Discussion Papers 2014/182, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Domenico Buccella & Luciano Fanti, 2017. "A game-theoretic approach to the choice of union-oligopoly baargaining agenda," Discussion Papers 2017/214, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    3. Luciano Fanti, 2015. "Union–firm bargaining agenda: right-to-manage or efficient bargaining?," Economics Bulletin, AccessEcon, vol. 35(2), pages 936-948.
    4. Fanti, Luciano & Buccella, Domenico, 2015. "Bargaining agenda in public and private monopoly," MPRA Paper 64184, University Library of Munich, Germany.
    5. Fanti, Luciano & Buccella, Domenico, 2015. "Bargaining agenda in a unionised monopoly with network effects," MPRA Paper 64090, University Library of Munich, Germany.
    6. Fanti Luciano & Buccella Domenico, 2016. "Privatisation or State Ownership When Labour Market is Unionised?," Folia Oeconomica Stetinensia, Sciendo, vol. 16(1), pages 21-36, December.
    7. Luciano Fanti & Domenico Buccella, 2019. "When unionisation is profitable for firms in network industries," Metroeconomica, Wiley Blackwell, vol. 70(4), pages 711-722, November.
    8. Luciano Fanti & Domenico Buccella, 2018. "Union–Firm Bargaining Agenda Revisited: When Unions Have Distinct Preferences," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 35-50, January.
    9. Buccella, Domenico & Fanti, Luciano, 2020. "Do labour union recognition and bargaining deter entry in a network industry? A sequential game model," Utilities Policy, Elsevier, vol. 64(C).
    10. Luciano Fanti & Domenico Buccella, 2016. "Bargaining Agenda and Entry in a Unionised Model with Network Effects," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(1), pages 91-121, March.
    11. Fanti, Luciano & Buccella, Domenico, 2015. "Bargaining agenda, timing, and entry," MPRA Paper 64089, University Library of Munich, Germany.

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    More about this item

    Keywords

    Efficient bargaining; Monopoly union; Right-to-manage; Cournot duopoly.;
    All these keywords.

    JEL classification:

    • 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

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