Productivity shocks in a union-duopoly model

António Brandão () and Joana Pinho
Additional contact information
António Brandão: CEF.UP and Faculdade de Economia do Porto.

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: We consider an industry where firms are asymmetric in terms of productivity. Wages and employment are determined at the firm-level and are the result of sequential bargaining between unions and firms, with wages being negotiated first. We characterise the equilibrium and compare the outcomes in the two firms (wages, employment and surplus of all economic agents). A productivity shock affecting the most efficient firm is socially desirable, by increasing the surplus of consumers, workers and firms. The same may not be true when the productivity shock affects the least efficient firm. In this case, the consumers’ gain may not be enough to outweigh the losses in aggregate worker surplus and in the industry profit.

Keywords: Asymmetric productivity; Decentralised bargaining; Duopoly; Productivity shocks (search for similar items in EconPapers)
JEL-codes: D60 J53 L13 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2016-09
New Economics Papers: this item is included in nep-bec, nep-ind and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.fep.up.pt/investigacao/workingpapers/wp576.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fep.up.pt/investigacao/workingpapers/wp576.pdf [302 Found]--> https://fep.up.pt/investigacao/workingpapers/wp576.pdf)

Related works:
Journal Article: Productivity Shocks in a Union‐Duopoly Model (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:576

Access Statistics for this paper

More papers in FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto Contact information at EDIRC.
Bibliographic data for series maintained by ().