Property Rights and Market: Employee Privatization as a Cooperative Bargaining Process

Marco Marini

MPRA Paper from University Library of Munich, Germany

Abstract: The paper presents a game-theoretic model in order to investigate to what extent an employee privatization program of a State owned firm can be feasible under certain assumptions concerning the players' objective functions and the market structure in which the firm operates. The public managers are assumed interested in the firm's value, while the workers aim at maximizing the per capita surplus over the wage. The privatization process is then described as a bargaining process between the government in the role of core investor in the firm's physical assets and the workers of the firm, whose only asset is their personal skill. In the model the market structure in which the firm sells its product is assumed to be imperfectly competitive. After presenting the case of a monopolistic firm, the paper explores what happens if the firm plays a duopoly quantity game. The final section is devoted to introducing to the analysis an x-efficiency cost proportional to the public share of the ownership.

Keywords: Bargaining; State-owned Firms; Privatization (search for similar items in EconPapers)
JEL-codes: C70 D21 D23 J54 L21 L23 (search for similar items in EconPapers)
Date: 1996-02
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Published in Economic Systems 4.20(1996): pp. 273-305

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Related works:
Working Paper: Property Rights and Market: Employee Privatization as a Cooperative Bargaining Process (1996)
Working Paper: Property rights and market: employee privatization as a cooperative bargaining process (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:31870

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