Unemployment and Product Market Competition in a Cournot Model with Efficiency Wage

Zhiqi Chen and Bo Zhao
Additional contact information
Bo Zhao: School of International Trade and Economics, University of International Business and Economics, http://site.uibe.edu.cn/english/english.html

No 10-04, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: This paper analyzes the impact of product market competition on unemployment, wage and welfare in a model where unemployment is caused by efficiency wage considerations and oligopolistic firms compete in quantity. It is shown that while more intensive competition in product market increases output and reduces price, it does not necessarily lead to a lower unemployment rate or a higher wage for workers. Consequently, the relationship between the intensity of competition and the level of employment (respectively, wage, welfare) is not monotonic, and, in some instances, has an inverted-U shape.

Keywords: Cournot competition; unemployment; efficiency wage (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-05-17
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mic
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Published: Carleton Economic Papers

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Related works:
Journal Article: Unemployment and product market competition in a Cournot model with efficiency wages (2014)
Journal Article: Unemployment and product market competition in a Cournot model with efficiency wages (2014)
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