Bargaining Structures and Agendas in an Unconstrained Hotelling Model

Domenico Buccella

Czech Economic Review, 2014, vol. 8, issue 3, 149-167

Abstract: The present paper investigates the effects of bargaining structures and agendas on the quality differentiation/location in the final-goods market. The framework is a unionized duopoly industry in the context of an unconstrained Hotelling linear city model. The presence of labor union(s) and the bargaining processes (i.e., centralized vs. decentralized structure; right-to-manage vs. participatory framework agenda) change the locational incentives of the firms with respect to the case of exogenous production costs. The results reveal that the effect of centralization on the two bargaining agendas is diametrically opposed. More specifically, in the participatory framework, centralization is a centrifugal force, while it is a centripetal force in the right-to-manage. The social welfare consequences are also briefly discussed.

Keywords: Spatial competition; bargaining; firms’ locations; unionized oligopoly (search for similar items in EconPapers)
JEL-codes: C72 D43 J51 L13 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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