Bargaining agenda in public and private monopoly

Luciano Fanti and Domenico Buccella

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses the choice of the bargaining agenda in a public/private unionised monopoly. Both the public and private monopolist always prefers the Right-To-Manage (RTM) to the Efficient Bargaining (EB) agenda. Private monopoly is socially preferred to the public one and conflict of interests on the preferred agenda arises between Government on one side and workers and consumers on the other side. In case of threat of market entry, the public (private) monopolist may strategically commit to RTM (EB) to deter entrance. If RTM is the ex-ante industry practice, a public incumbent company cannot use the EB agenda as a strategic tool to deter entry, while an incumbent private company can use it. An opposite result holds when EB is the established practice in the industry: the incumbent public company can use RTM to deter entry, while the incumbent private company cannot. The social welfare implications are analysed.

Keywords: Public and private monopoly; Efficient Bargaining; Right-to-manage; Entry; Firm-union bargaining agenda (search for similar items in EconPapers)
JEL-codes: H44 J51 L13 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-com and nep-ind
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