The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly

Kangsik Choi

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the timing of endogenous wage setting under Bertrand competition in a unionized mixed duopoly. The results are that when the public firm chooses the timing of wage setting: (1) sequential wage setting is the outcome and (2) simultaneous wage setting is the outcome. The first result coincides with the choices of the private firm, its union, and the union of the public firm if imperfect substitutability is sufficiently large. This result is in contrast to the findings of prior literature. However, but the second result does not coincide between firms and their unions if imperfect substitutability is sufficiently small. However, simultaneous wage setting is more likely to improve the welfare if imperfect substitutability is sufficiently small. Furthermore, we find that the impact of sequential wage setting on the equilibrium path is lower in terms of improving welfare than the other outcome of sequential wage setting.

Keywords: Endogenous Wage Setting; Bertrand Competition; Mixed Duopoly; Social Welfare. (search for similar items in EconPapers)
JEL-codes: D21 H44 J51 L13 (search for similar items in EconPapers)
Date: 2010-01-22
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20205

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