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A game-theoretic approach to the choice of union-oligopoly baargaining agenda

Domenico Buccella () and Luciano Fanti

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

Abstract: This paper investigates the selection of the bargaining agenda in a unionized industry with decentralized negotiations for different competition modes. The firms choose the agenda (Right-to- Manage, RTM vs. Efficient Bargaining, EB), considering alternative timing of the bargaining game in the case of mixed duopoly. In fact, the EB (RTM) firm can be either Stackelberg wage follower (leader) or Stackelberg output leader (follower). It is developed a two-stage game in which the typology as well as the timing of the negotiations is endogenous. It is shown that, in pure strategies, no equilibria arise for a wide set of the parameters EÖ space while RTM appears as the unique equilibrium agenda for a different, large combination of the parameters; moreover, multiple, asymmetric equilibria emerge in a limited area of the parameters EÖ space. These results are in sharp contrast to the received literature in which EB can arise as an industry bargaining institution in equilibrium.

Keywords: Efficient Bargaining; Right-to-Manage; Union Eôoligopoly bargaining agenda. (search for similar items in EconPapers)
JEL-codes: J51 L20 (search for similar items in EconPapers)
Date: 2017-01-01
New Economics Papers: this item is included in nep-com and nep-gth
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2017/214

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