 On the Cournot–Bertrand Profit Differential and the Structure of Unionisation in a Managerial DuopolyLuciano Fanti and Nicola Meccheri () Australian Economic Papers, 2015, vol. 54, issue 4, 266-287 Abstract: type="main"> This paper deals with the issue of the Cournot–Bertrand profit differential by bringing together two different strands of the industrial organisation literature: managerial delegation and unionised oligopolies. Relative to unionisation, two alternative regimes are analysed and compared: ‘decentralised unionisation’, involving firm-specific unions, and ‘centralised unionisation’, in which an industry-wide union sets a uniform wage for the entire industry. The ‘reversal result’ – that is, profits are higher under Bertrand than under Cournot – applies irrespective of the unionisation regime and for a very wide range of product differentiation. Moreover, it is more likely to occur when unionisation is decentralised than centralised and, especially when products are not too much differentiated, the profit differential in favour of price competition is also larger in the presence of firm-specific unions. However, if firm owners not only delegate the choice of the strategic variable but also that of the competition regime, managers always opt to compete in quantities, thus generating an inefficient choice for owners. Date: 2015 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:54:y:2015:i:4:p:266-287 Ordering information: This journal article can be ordered from Access Statistics for this article Australian Economic Papers is currently edited by Daniel Leonard More articles in Australian Economic Papers from Wiley Blackwell |
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