Price competition, merger and welfare under firm-specific unions: on the role of unions' preference towards wages

Luciano Fanti and Nicola Meccheri ()

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: This paper analyses the effects of a downstream merger in a differentiated duopoly under price competition and firm-specific unions. In contrast with the acquired wisdom, we show that a downstream merger may increase overall welfare when products are sufficienly substitutes and unions are sufficiently oriented towards wages.

Keywords: mergers; social welfare; price competition; plant-specific unions. (search for similar items in EconPapers)
JEL-codes: D43 J50 L13 (search for similar items in EconPapers)
Date: 2012-04-01
New Economics Papers: this item is included in nep-ind
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2012/136

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