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A game-theoretic approach to the choice of union-oligopoly baargaining agenda

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Listed:
  • Domenico Buccella
  • Luciano Fanti

Abstract

This paper investigates the selection of the bargaining agenda in a unionized industry with decentralized negotiations for different competition modes. The firms choose the agenda (Right-to- Manage, RTM vs. Efficient Bargaining, EB), considering alternative timing of the bargaining game in the case of mixed duopoly. In fact, the EB (RTM) firm can be either Stackelberg wage follower (leader) or Stackelberg output leader (follower). It is developed a two-stage game in which the typology as well as the timing of the negotiations is endogenous. It is shown that, in pure strategies, no equilibria arise for a wide set of the parameters EÖ space while RTM appears as the unique equilibrium agenda for a different, large combination of the parameters; moreover, multiple, asymmetric equilibria emerge in a limited area of the parameters EÖ space. These results are in sharp contrast to the received literature in which EB can arise as an industry bargaining institution in equilibrium.

Suggested Citation

  • 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.
    • Handle: RePEc:pie:dsedps:2017/214
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2017-214.pdf
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    References listed on IDEAS

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    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.
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    More about this item

    Keywords

    Efficient Bargaining; Right-to-Manage; Union Eôoligopoly bargaining agenda.;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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