Abstract

BUCCELLA, Domenico  and  FANTI, Luciano. A game-theoretic approach to the choice of union-oligopoly bargaining agenda. Inv. Econ [online]. 2018, vol.77, n.305, pp.97-120. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2018.305.67485.

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, versus 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). A two-stage game is developed 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’ space while RTM appears as the unique equilibrium agenda for a different combination of the parameters; moreover, multiple, asymmetric equilibria emerge in a limited area of the parameters’ 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-oligopoly bargaining agenda.

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