Union–firm Bargaining Agenda Revisited: When Unions Have Distinct Preferences

Fanti, Luciano; Buccella, Domenico

doi:10.1111/boer.12113

Cited by 4 publications

(1 citation statement)

References 22 publications

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“…As Booth (1995) remarks, "It appears to be an empirical regularity that imperfections in the labour market are correlated with imperfections in the product market". Furthermore, the literature on unionised oligop-60 luciano fanti and domenico buccella oly has considered in depth the role of unionised labour (Naylor, 2003), different bargaining agendas (Fanti and Buccella, 2018) and different payment schemes (fixed wage vs performance related pay, in particular profit-sharing rules) (Lazear, 2000, Sørensen, 1992, Buccella, 2016. On the other hand, it is also widely acknowledged that product market performances and social welfare outcomes are strictly mutually dependent.…”

Section: Introductionmentioning

confidence: 99%

Social Welfare and Profit-Sharing Rule in a Unionised Duopoly with Profit Tax/Subsidy

Fanti¹,

Buccella²

2018

HPE-RPE

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This paper investigates the effects of the introduction of a profit-sharing rule and a profit tax/subsidy (T/S) policy on social welfare in a Cournot duopoly in the presence of decentralized firm-union bargaining over wage rates. It is shown that 1) the social welfare is always increasing in the share of profits distributed to workers and profit taxation is not neutral: the optimality rule prescribes complementarity in their use; 2) although an increasing profit-sharing parameter has conflicting effects (i.e. the net profit accruing to the firms reduces, workers and consumers' welfare increase), a sufficiently high profit-sharing rule may be in the interest of the society, because it allows for eliminating the inefficiency due to the labour market imperfections. Moreover, we show that a "third best" optimal social welfare (given the institutional constraint of a non-negative wage rate) can be achieved. Interestingly, in this case, firms and workers achieve the maximal welfare. Therefore, we argue that profit-subsidisation may be used for motivating firms to apply the "socially optimal profit-sharing rule", which warrants Pareto-superior outcomes for producers (firms and workers) (for instance, in the special case of monopoly unions and perfect substitute goods, the rule corresponding to a 50 per cent net profit share distributed to workers, jointly with a 50 per cent profit subsidisation).

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Section: Introductionmentioning

confidence: 99%

Social Welfare and Profit-Sharing Rule in a Unionised Duopoly with Profit Tax/Subsidy

Fanti¹,

Buccella²

2018

HPE-RPE

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Bargaining Agenda in a Unionized Bilateral Monopoly

Fanti

Buccella

2019

Labour

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The endogenous choice of the bargaining agenda between the two alternatives of Right‐to‐Manage (RTM, i.e., only wages are negotiated) and Efficient Bargaining (EB, i.e., both wages and employment are negotiated) is examined in a vertically integrated unionized bilateral monopoly with firm‐specific negotiations. Although the RTM agenda emerges as the unique subgame perfect equilibrium choice, a joint commitment to EB agendas leads both bilateral monopolists to gain higher profits, provided that the union bargaining power is adequately weak. This result is in sharp contrast to previous findings that the RTM typically secures higher profits to a single unionized monopolist.

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Multi-Unionism at the Firm Level: The Impact of Asymmetric Nash Bargaining Solutions on Labor Unions’ Merger Incentives

Cords

2021

Int. Game Theory Rev.

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This paper investigates the incentives of labor unions to merge in a right-to-manage model for several bargaining regimes. It is assumed that the worker groups produce different goods, and that the products are either substitutable in consumption (tariff competition), complementary (tariff plurality), or are independent of one another. The already existing merger results can be replicated in a right-to-manage model when joint bargaining is compared to simultaneous and sequential bargaining: labor unions have strict incentives to merge if the two products are substitutes in consumption, while they bargain independently if the products are complements in consumption. Further, there exists a first-mover advantage for unions under sequential bargaining for complementary products. Workers, on the other hand, benefit from a first-mover advantage in terms of their wage for the entire degree of product differentiation under sequential bargaining.

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Union–firm Bargaining Agenda Revisited: When Unions Have Distinct Preferences

Cited by 4 publications

References 22 publications

Social Welfare and Profit-Sharing Rule in a Unionised Duopoly with Profit Tax/Subsidy

Social Welfare and Profit-Sharing Rule in a Unionised Duopoly with Profit Tax/Subsidy

Bargaining Agenda in a Unionized Bilateral Monopoly

Multi-Unionism at the Firm Level: The Impact of Asymmetric Nash Bargaining Solutions on Labor Unions’ Merger Incentives

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