1,159 research outputs found
Union–firm bargaining agenda revisited: when unions have distinct preferences
No full textIn this paper we revisit the issue of the scope of bargaining between firms and unions by considering
a more general union’s utility functionwith distinct preferences and sequential negotiations. First,we
compare exogenously given labour market institutions; i.e., right-to-manage (RTM) and sequential
efficient bargaining (SEB). We show that the conventional wisdom, which states that firms always
prefer RTM, no longer holds. In fact, when unions are adequately wage aggressive and have strong
enough bargaining power, firms may prefer SEB negotiations; however, firms switch their preference
to RTM when unions are very strong. Moreover, we show that a conflict of interest between the
parties may emerge when unions are sufficiently employment oriented as well as sufficiently
wage aggressive and not too strong or too weak in bargaining. Second, we analyse the endogenous
choice of the bargaining agenda. We show that a rich plethora of equilibria may occur and new
situations of conflict/agreement of interests between the bargaining parties arise in particular when
unions are sufficiently wage-aggressive
Profit raising entry effects in network industries with Corporate Social Responsibility
No full textThis note investigates the possibility of profit raising entry in network industries where firms follow Corporate Social Responsibility (CSR) behaviours, showing the interaction between the network and CSR features. In particular, for high levels of the network effect, an incumbent’s profits raising entry effect occurs. The latter result is at odds with the conventional wisdom and shows another channel the preceding literature has so far not explored for the possibility of a profit raising entry
Bargaining Agenda in a Unionized Bilateral Monopoly
No full textThe endogenous choice of the bargaining agenda between the two alternatives of Right-to-Manage (RTM, i.e., only wages are negotiated) and Efficient Bargaining (EB, i.e., both wages and employment are negotiated) is examined in a vertically integrated unionized bilateral monopoly with firm-specific negotiations. Although the RTM agenda emerges as the unique subgame perfect equilibrium choice, a joint commitment to EB agendas leads both bilateral monopolists to gain higher profits, provided that the union bargaining power is adequately weak. This result is in sharp contrast to previous findings that the RTM typically secures higher profits to a single unionized monopolist
Manager-Union Bargaining Agenda Under Monopoly and with Network Effects
No full textThis paper investigates the bargaining agenda selection in a unionised monopoly with managerial delegation (MD). In contrast to the conventional wisdom, monopoly profits with MD under sequential Efficient Bargaining (SEB) exceed those under Right-to-Manage (RTM), while the union can prefer RTM to SEB: paradoxically, a conflict of interests between the parties may still exist but for reversed choices of the agenda. Consumption externalities change the picture. The monopolist still prefers SEB; however, provided that network effects are sufficiently strong, the union prefers SEB even for a relatively low bargaining power. Thus, the parties endogenously choose the SEB agenda which is also Pareto-superior
Corporate social responsibility in a unionised duopoly
No full textAbstract: It is commonly believed that the choice of adopting Corporate Social Responsibility (CSR) behaviours is beyond the scope of profit enhancement. In a unionised oligopoly with centralised wage setting and decreasing returns to scale technology, the present paper shows that the owners’ choice of the CSR engagement level is dictated by the firms’ purely selfish profit-seeking objective. In fact, profits under CSR are higher than under the standard profit-maximising rule. Moreover, the union, consumers and the social welfare on the whole with CSR are higher than without CSR: the firms’ owners social concern leads to a Pareto-superior outcome.Resumen: Suele considerarse que la adopción de conductas asociadas a la responsabi- lidad social empresarial está más allá de la maximización de beneficios. Este trabajo muestra que en el contexto de un oligopolio sindicalizado con decisiones centralizadas de fijación de salarios y retornos decrecientes, la elección del nivel de adopción de responsabilidad social empresarial se rige por el motivo de maximización de utilidades. De hecho, los beneficios de la empresa y el bienestar social, de los consumidores y trabajadores son mayores, conduciendo a un resultado Pareto superior
Managerial delegation games and corporate social responsibility
No full textIn a duopoly in which firms universally engage in corporate social responsibility (CSR) activities, this paper shows that, in contrast to the main tenet of the received managerial delegation literature, if the CSR sensitivity is sufficiently high: (a) when both firms delegate output decisions to managers, at the equilibrium profit (resp. consumer welfare) is higher (resp. lower) than when firms are pure CSR; (b) in a managerial delegation game, asymmetric multiple subgame perfect Nash equilibria emerge in which one firm delegates and the rival does not. These results hold under both the “sales delegation” and “relative profits” manager's bonus schemes
When unionisation is profitable for firms in network industries
No full textIn an industry characterised by the presence of network effects, this paper investigates a duopolistic game in which firms may choose whether to bargain over wages and employment with unions or to face a competitive labour market (i.e., without unions). If unions are sufficiently wage‐sensitive, it is shown that the presence of sufficiently large network effects makes unionisation the Pareto efficient sub‐game perfect Nash equilibrium outcome for firms
Cournot and Bertrand Competition in the Software Industry
No full textIn a software industry based on a platform firm and two firms producing differentiated applications complementary to the platform, we investigate the effects on profits and welfare of the choice of different contracts (price versus quantity) by the application firms. In contrast to the traditional result, (1) equilibrium profits are higher under Cournot or Bertrand competition depending upon the degree of complementarity between platform and application producers as well as the degree of substitutability between applications; (2) the social welfare may be higher under Cournot when the application products are highly substitutable.</jats:p
Firms Controlled By Owners And Managerial Firms: The ‘Strategic’ Trade Policy Game Revisited
No full textQuesto articolo riesamina il tema della politica commerciale strategica di due paesi esportatori in un terzo mercato in presenza di diverse strutture organizzative delle imprese, considerando, da un lato, imprese in cui il controllo è esercitato dai membri di una famiglia e, dall’altro lato, imprese con azionariato diffuso i cui consigli di amministrazione delegano la scelta dei livelli di produzione a manager, con un processo di negoziazione fra proprietari e manager sui contratti di quest’ultimi. Contrariamente ai risultati tradizionali, si dimostra che in presenza di un processo di negoziazione in un gioco di delega manageriale delle scelte produttive emerge una pletora di equilibri di Nash rispetto alle scelte di intervenire con politiche commerciali oppure di ‘laissez faire’ e l'attuazione delle politiche commerciali in entrambi i paesi può essere efficiente (cioè, i livelli di benessere sociale nazionali sono più alti di quelli in regime di libero commercio). Tali equilibri dipendono sia dal potere contrattuale del manager che dal grado di concorrenza tra prodotti. I risultati del lavoro suggeriscono che, in caso di intervento, i decisori delle politiche commerciali debbano prendere in considerazione sia la struttura di proprietà che la corrispondente forma organizzativa delle imprese esportatrici
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