The codetermined firm in a Cournot duopoly: a stability analysis

Luciano Fanti and Luca Gori ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study the stability issue in a Cournot duopoly with codetermined firms. We show that when both firms codetermine employment together with decentralised employees’ representatives, a rise in wages acts as an economic de-stabiliser (stabiliser) when the wage is fairly low (high), while under profit maximisation a rise in wages always stabilises the market equilibrium. Moreover, increasing the union’s bargaining power has a de-stabilising effect, except when the wage is low and the firm’s power is already high.

Keywords: Bifurcation; Codetermination; Cournot; Duopoly; Employment (search for similar items in EconPapers)
JEL-codes: C62 D43 L13 (search for similar items in EconPapers)
Date: 2011-10-16
New Economics Papers: this item is included in nep-bec, nep-cis and nep-lab
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Related works:
Journal Article: The codetermined firm in a Cournot duopoly: A stability analysis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:34144

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