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Strategic Managerial Incentives in an Unionized Duopoly

Author

Listed:
  • Bughin, Jacques

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This note reconsiders the problem of managerial incentives in the context of an unionized Nash-Cournot oligopoly. It is hightlighted that managerial incentives weaken union power at industry equilibrium, although, as a symptom of a prisoner dilemma, unions are not reluctant to the existence of those managerial contracts. A direct consequence of this finding is that the adequate employer’s utility function when modelling wage negotiation outcomes should be different from simple firm profit-maximization.

Suggested Citation

  • Bughin, Jacques, 1992. "Strategic Managerial Incentives in an Unionized Duopoly," LIDAM Discussion Papers IRES 1992018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1992018
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