Product market cooperation under efficient bargaining with different disagreement points: a result | Zendy

Domenico Buccella | Zendy

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Product market cooperation under efficient bargaining with different disagreement points: a result

Author(s) -

Domenico Buccella

Publication year - 2015

Publication title -

economics and business review/the poznań university of economics review

Language(s) - English

Resource type - Journals

eISSN - 2392-1641

pISSN - 1643-5877

DOI - 10.18559/ebr.2015.4.2

Subject(s) - duopoly , microeconomics , monopoly , product market , wage bargaining , bargaining power , economics , point (geometry) , product (mathematics) , homogeneous , stochastic game , bargaining problem , oligopoly , cournot competition , industrial organization , labour economics , wage , physics , thermodynamics , geometry , mathematics , incentive

This paper analyzes the effects of product market cooperation in a duopoly with homogeneous goods. Labor unions and firms are locked in bilateral monopoly relations and bargaining within the industry takes place under the efficient bargaining (EB) model. The paper discusses the role of different firms’ disagreement payoff on bargaining outcomes and their effect on social welfare components. It shows that the disagreement point of firms can play a crucial role in solving potential conflicts of interest between unions and firms concerning bargaining issues.

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