Managerial delegation under alternative unionization structures

Nicola Meccheri () and Luciano Fanti

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: This paper studies a three-stage duopoly game with managerial delegation and unions that can be either decentralized or industry-wide. Main findings point out the opposite role played by the introduction of managerial delegation according to the different nature of unionization structure. While under industry-wide union managerial delegation leads to incentives for sales, lower profits and higher consumer surplus as well as overall welfare, in the presence of decentralized unionization all those results are reversed unless unions are strongly employment-oriented. Moreover, introducing managerial delegation makes unionization structure neutral in relation to consumer's surplus and overall efficiency. Finally, the timing of moves in the three-stage game proves to be important for obtaining the above qualitative results under decentralized unionization.

Keywords: managerial delegation; unionized duopoly; union's structure. (search for similar items in EconPapers)
JEL-codes: J51 L13 L21 (search for similar items in EconPapers)
Date: 2012-06-01
Note: ISSN 2039-1854
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Managerial Delegation under Alternative Unionization Structures (2013)
Working Paper: Managerial Delegation under Alternative Unionization Structures (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2012/138

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