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Wage bargaining and quality competition

Author

Listed:
  • Bhattacharyya, Ranajoy
  • Saha, Bibhas

Abstract

In a standard model of vertical differentiation, wage is assumed to determine the quality. Wage is also subject to bargaining. Increased bargaining power of the worker in the low quality firm reduces quality differential, and increases price competitiveness. The Opposite happens from a similar change in the high quality firm.

Suggested Citation

  • Bhattacharyya, Ranajoy & Saha, Bibhas, 2011. "Wage bargaining and quality competition," MPRA Paper 30968, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:30968
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Wage bargaining; Quality competition;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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