 Welfare effects of cross-ownership in a unionised duopolyDiscussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy Abstract: The present study analyses the effects of an increase in the share of crossownership in a Cournot duopoly with firm-specific monopolistic unions. Since the cross-participation at ownership level implies a lower degree of competition, then in a duopoly without unions, as expected, consumer surplus and social welfare, despite the increase in the industry profits, reduces when cross-participation increases. By contrast, when the labour market is unionised, we show the counterintuitive result, that despite the degree of competition is reduced by cross-ownership, both consumer surplus and social welfare increase with the share of cross-participation. This always occurs provided that unions are sufficiently wage-oriented. Therefore, the policy implication is that, when wage-interested unions are in existence in oligopoly industries, a rise in cross-participation - i.e., a lower degree of competition - is socially preferred. Moreover, all agents (firm's owner, workers and consumers) agree for the highest possible level of cross-participation. Keywords: Cross-ownership; Duopoly; Unions; Social Welfare. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2011/125 Access Statistics for this paper More papers in Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy Contact information at EDIRC. |
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