Endogenous timing of managerial contracts in unionised oligopolies

Luciano Fanti and Nicola Meccheri ()

Working Paper series from Rimini Centre for Economic Analysis

Abstract: In a managerial duopoly with unionised labour markets, this paper analyses whether owners of firms prefer to decide on incentive contracts for their managers sequentially or simultaneously. When firms compete in quantities, firms' owners can prefer choosing incentive contracts simultaneously or sequentially, depending on the unions' relative bargaining power and the degree of product differentiation. Instead, when firms compete in prices, firms' owners choose incentive contracts sequentially with substitute goods and simultaneously with complement goods. While the result under Bertrand confirms that obtained by the received literature in a framework where labour markets are competitive (non-unionised), the result under Cournot is distinctly different.

Keywords: endogenous timing; managerial contracts; unionised oligopoly (search for similar items in EconPapers)
JEL-codes: J33 J51 L13 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-com, nep-cta and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:16-19

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