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

Author

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

    as
    1. 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.
    2. 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.
    3. Dowrick, Steve, 1990. "The relative profitability of Nash bargaining on the labour demand curve or the contract curve," Economics Letters, Elsevier, vol. 33(2), pages 121-125, June.
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    12. Luciano Fanti, 2015. "Union–firm bargaining agenda: right-to-manage or efficient bargaining?," Economics Bulletin, AccessEcon, vol. 35(2), pages 936-948.
    13. Luciano Fanti & Domenico Buccella, 2016. "Strategic trade policy and union-firm bargaining agenda," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(6), pages 787-808, September.
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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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