Abstract
Making use of a Conjectural Variation model, the present note re-examines the subject of the firms’ profits ranking under different degrees of market competition in a unionized duopoly with industry-wide Efficient Bargaining (EB). It is shown that, while Cournot-like competition profits are always larger than Bertrand-like ones with separated wage negotiations, an uniform wage bargaining can lead to the appearance of the reversal.
Acknowledgements
We are extremely grateful to an anonymous referee for her/his useful comments and suggestions that have enhanced the clarity and quality of the paper. All remaining errors are, of course, our sole responsibility. The usual disclaimers apply.
References
Alipranti, M., C. Milliou, and E. Petrakis. 2014. “Price vs. Quantity Competition in a Vertically Related Market.” Economics Letters 124 (1): 122–26.10.1016/j.econlet.2014.05.002Suche in Google Scholar
Basak, D. 2017. “Cournot vs. Bertrand under Centralized Bargaining.” Economics Letters 154: 124–27.10.1016/j.econlet.2017.02.031Suche in Google Scholar
Basak, D., and L. F. S. Wang. 2016. “Endogenous Choice of Price or Quantity Contract & the Implications of Two-Part-Tariff in a Vertical Structure.” Economics Letters 138: 53–56.10.1016/j.econlet.2015.11.026Suche in Google Scholar
Buccella, D. 2011. “Corrigendum to “The Strategic Choice of Union-Oligopoly Bargaining agenda”[Int. J. Ind. Organ. 17 (1999) 1029–1040].” International Journal of Industrial Organization 29 (6): 690–93.10.1016/j.ijindorg.2011.03.003Suche in Google Scholar
Buccella, D. 2014. “Product Market Competition with Differentiated Goods and Social Welfare in the Presence of an Industry-Wide Union.” Portuguese Economic Journal 13 (2): 131–40.10.1007/s10258-014-0102-xSuche in Google Scholar
Buccella, D. 2015. “Unionized Duopoly, Market Competition with Differentiated Products, and Welfare.” Economia e Politica Industriale 42 (4): 455–73.10.1007/s40812-015-0018-1Suche in Google Scholar
Bughin, J. 1993. “Union-Firm Efficient Bargaining and a Test of Oligopolistic Conduct.” Review of Economics and Statistics 75: 563–67.10.2307/2109477Suche in Google Scholar
Correa-López, M. 2007. “Price and Quantity Competition in a Differentiated Duopoly with Upstream Suppliers.” Journal of Economics & Management Strategy 16 (2): 469–505.10.1111/j.1530-9134.2007.00146.xSuche in Google Scholar
Correa-López, M., and R. A. Naylor. 2004. “The Cournot–Bertrand Profit Differential: A Reversal Result in A Differentiated Duopoly with Wage Bargaining.” European Economic Review 48: 681–96.10.1016/S0014-2921(02)00326-4Suche in Google Scholar
Davidson, C. 1988. “Multiunit Bargaining in Oligopolistic Industries.” Journal of Labor Economics 6 (3): 397–422.10.1086/298189Suche in Google Scholar
De Fraja, G. 1993. “Staggered vs. Synchronised Wage Setting in Oligopoly.” European Economic Review 37: 1507–22.10.1016/0014-2921(93)90119-USuche in Google Scholar
Dhillon, A., and E. Petrakis. 2002. “A Generalised Wage Rigidity Result.” International Journal of Industrial Organization 20: 285–311.10.1016/S0167-7187(00)00065-5Suche in Google Scholar
Dobbalaere, S., and J. Mairesse. 2011. “Panel Data Estimates of the Production Function and Product and Labor Market Imperfection.” Journal of Applied Econometrics 28 (1): 1–46.10.3386/w13975Suche in Google Scholar
Dowrick, S. 1989. “Union-Oligopoly Bargaining.” The Economic Journal 99: 1123–42.10.2307/2234092Suche in Google Scholar
Escrihuela-Villar, Marc. 2015. “A Note on the Equivalence of the Conjectural Variations Solution and the Coefficient of Cooperation.” The B.E. Journal of Theoretical Economics 15 (2): 473–80.10.1515/bejte-2014-0094Suche in Google Scholar
Escrihuela-Villar, Marc. 2016. “On Merger Profitability and the Intensity of Rivalry.” The B.E. Journal of Economic Analysis & Policy 16 (2): 1203–12.10.1515/bejeap-2015-0209Suche in Google Scholar
Fanti, L., and N. Meccheri. 2011. “The Cournot-Bertrand Profit Differential in a Differentiated Duopoly with Unions and Labour Decreasing Returns.” Economics Bulletin 31: 233–44.Suche in Google Scholar
Fanti, L., and N. Meccheri. 2012. “Labour-Decreasing Returns, Industry-Wide Union and Cournot-Bertrand Profit Ranking. A Note.” Economics Bulletin 32 (1): 894–904.Suche in Google Scholar
Horn, H., and A. Wolinsky. 1988. “Bilateral Monopolies and Incentives for Merger.” RAND Journal of Economics 19 (3): 408–19.10.2307/2555664Suche in Google Scholar
Ivaldi, M., B. Jullien, P. Rey, P. Seabright, and J. Tirole, 2003. The Economics of Tacit Collusion. Final report for DG competition, European Commission, 1–75.Suche in Google Scholar
Kraft, K. 2006. “Wage versus Efficient Bargaining in Oligopoly.” Managerial and Decision Economics 27: 595–604.10.1002/mde.1277Suche in Google Scholar
MaCurdy, T. E., and J. H. Pencavel. 1986. “Testing between Alternative Models of Wage and Employment Determination in Unionized Markets.” Journal of Political Economy 94: S3–S39.10.1086/261398Suche in Google Scholar
Martin, S. 2002. Advanced Industrial Economics,, 2nd. Oxford: John Wiley & Sons.Suche in Google Scholar
McAfee, R. P., and M. Schwartz. 1994. “Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity.” American Economic Review 84 (1): 210–30.10.1257/0002828041464632Suche in Google Scholar
McDonald, I. M., and R. M. Solow. 1981. “Wage Bargaining and Employment.” American Economic Review 71 (5): 896–908.10.1007/978-94-011-2378-5_5Suche in Google Scholar
Milliou, C., and E. Petrakis. 2007. “Upstream Horizontal Mergers, Vertical Contracts, and Bargaining.” International Journal of Industrial Organization 25: 963–87.10.1016/j.ijindorg.2006.11.007Suche in Google Scholar
Mukherjee, A. 2010. “Product Market Cooperation, Profits and Welfare in the Presence of Labor Union.” Journal of Industry, Competition and Trade 10: 151–60.10.1007/s10842-009-0063-4Suche in Google Scholar
Nickell, S. J., and M. Andrews, 1983. Unions Real Wages and Employment in Britain 1951–1979. Oxford Economic Papers 35 (Supplement): 183–206.10.1093/oxfordjournals.oep.a041610Suche in Google Scholar
Singh, N., and X. Vives. 1984. “Price and Quantity Competition in a Differentiated Duopoly.” RAND Journal of Economics 15: 546–54.10.2307/2555525Suche in Google Scholar
Symeonidis, G. 2008. “Downstream Competition, Bargaining, and Welfare.” Journal of Economics & Management Strategy 17 (1): 247–70.10.1111/j.1530-9134.2008.00177.xSuche in Google Scholar
Symeonidis, G. 2010. “Downstream Merger and Welfare in a Bilateral Oligopoly.” International Journal of Industrial Organization 28 (3): 230–43.10.1016/j.ijindorg.2009.08.004Suche in Google Scholar
Varian, H. 1992. Microeconomic Analysis, 3rd ed. New York: W.W. Norton & Company.Suche in Google Scholar
© 2019 Walter de Gruyter GmbH, Berlin/Boston
Artikel in diesem Heft
- Research Articles
- Sustaining Cooperation Through Strategic Self-Interested Actions
- Endogenous Markup, Per Capita Income and Population Size in the Gravity Equation
- Profits Under Centralized Negotiations: The Efficient Bargaining Case
- Disentangling Intertemporal Substitution and Risk Aversion Under the Expected Utility Theorem
- Managerial Delegation Contracts, “Green” R&D and Emissions Taxation
- Entry Deterrence, Coordinating Advertising and Pricing in Markets with Consumption Externalities
- Do Time Preferences Matter in Intertemporal Consumption and Portfolio Decisions?
- From Jungle to Civilized Economy: The Power Foundation of Exchange Economy Equilibrium
- Endogenous Matching and Money with Random Consumption Preferences
- Notes
- An Asymmetric Duopoly Model of Price Framing
- A First Price Auction with an Arbitrary Number of Asymmetric Bidders
- Stable Matching with Double Infinity of Workers and Firms
Artikel in diesem Heft
- Research Articles
- Sustaining Cooperation Through Strategic Self-Interested Actions
- Endogenous Markup, Per Capita Income and Population Size in the Gravity Equation
- Profits Under Centralized Negotiations: The Efficient Bargaining Case
- Disentangling Intertemporal Substitution and Risk Aversion Under the Expected Utility Theorem
- Managerial Delegation Contracts, “Green” R&D and Emissions Taxation
- Entry Deterrence, Coordinating Advertising and Pricing in Markets with Consumption Externalities
- Do Time Preferences Matter in Intertemporal Consumption and Portfolio Decisions?
- From Jungle to Civilized Economy: The Power Foundation of Exchange Economy Equilibrium
- Endogenous Matching and Money with Random Consumption Preferences
- Notes
- An Asymmetric Duopoly Model of Price Framing
- A First Price Auction with an Arbitrary Number of Asymmetric Bidders
- Stable Matching with Double Infinity of Workers and Firms