Choi, Kangsik (2009): Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly.
Download (260kB) | Preview
This study investigates social welfare and privatization depending on the government's preference for tax revenues and the timing of wage setting in either a unionized-mixed or a unionized-privatized duopolistic market. We show that bargaining over wages is always sequential regardless of who decide the timing of endogenous wage setting and market type except for the following cases; (i) there cannot be any sustained equilibrium or (ii) any timing can be sustained as an equilibrium. Moreover, if the government's preference for tax revenues is sufficiently large, the privatization of the public firm is harmful in terms of both social welfare and government's payoff whether the wage setting is simultaneous or not. However, if the government's preference for tax revenues is sufficiently small, there can exist incongruence regarding privatization between the public firm and the government.
|Item Type:||MPRA Paper|
|Original Title:||Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly|
|Keywords:||Endogenous Wage Setting, Government's Preference, Social Welfare, Tax, Privatization.|
|Subjects:||C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C79 - Other
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection
L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out
H - Public Economics > H4 - Publicly Provided Goods > H44 - Publicly Provided Goods: Mixed Markets
|Depositing User:||Kangsik Choi|
|Date Deposited:||11. Sep 2009 06:28|
|Last Modified:||25. Sep 2015 16:06|
Barcena-Ruiz, J. C. and M. L. Campo, 2000,``Short-term or Long-term Labor Contracts," Labour Economics, 7, 249-260.
Barcena-Ruiz, J. C. and F. J. Casado-Izaga, 2008,``Timing in Endogenous Bargaining Over Costs and Firm Location," Journal of Economics, 95, 149-166.
Barcena-Ruiz, J. C. and M. B. Garzon, 2009, ``Relocation and Public Ownership of Firms," Journal of the Japanese and International Economies, 23, 71-85.
Barros, F., 1995, ``Incentive Schemes as Strategic Variables: An Application to a Mixed Duopoly," International Journal of Industrial Organization, 13, 373-386.
Booth, A., 1995, The Economics of the Trade Union, Cambridge, Cambridge University Press.
Brekke, K. and O. R. Straume, 2004, ``Bilateral Monopolies and Location Choice," Regional Science and Urban Economics, 34, 275-288.
Brennan, G. and J. Buchanan, 1980, The Power to Tax: Analytical Foundations of a Fiscal Constitution, Cambridge University Press.
Brulhart, M. and M. Jametti, 2006, ``Vertical versus Horizontal Tax Externalities: An Empirical Test," Journal of Public Economics, 90, 2027-2062.
Brulhart, M. and M. Jametti, 2007, ``Does Tax Competition Tame the Leviathan?," CEPR Discussion Papers, No 6512.
Capuano, C. and G. De Feo, 2008, ``Mixed Duopoly, Privatization and the Shadow Cost of Public Funds," CORE Discussion Paper 2008-15.
Choi, K., 2009, ``Privatization and Government's Preference under Mixed Oligopoly: A Generalization," Economics Bulletin, 29, 868-873.
Corneo, G., 1995, ``National Wage Bargaining in an International Integrated Product Markets," European Journal of Political Economy, 11, 503-520.
De Fraja, G., 1991, ``Efficiency and Privatization in Imperfectly Competitive Industries," Journal of Industrial Economics, 39, 311-321.
De Fraja, G., 1993a, ``Staggered vs. Synchronized Wage Setting in Oligopoly," European Economic Review, 37, 1507-1522.
De Fraja, G., 1993b, ``Union and Wages in Public and Private Firms: A Game Theoretic Analysis," Oxford Economic Papers, 45, 457-469.
De Fraja, G. and F. Delbono 1989, ``Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, 41, 302－311.
Haskel, J. and A. Sanchis, 1995, ``Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, 43, 301-321.
Haskel, J. and S. Szymanski, 1993, ``Privatization, Liberalization, Wages and Employment: Theory and Evidence for the UK," Economica, 60, 161-182.
Haucap, J. and C. Wey, 2004,``Unionisation Structures and Innovation Incentives," Economic Journal, 114: C149-C465.
Ishida, J. and N. Matsushima, 2008, ``Outward FDI in Unionized Oligopoly: Welfare and Policy Implications," Osaka University, OSIPP Discussion Paper DP-2008-E-005.
Ishida, J. and N. Matsushima, 2009, ``Should Civil Servants be Restricted in Wage Bargaining? A Mixed-Duopoly Approach," Journal of Public Economics, 93, 634-646.
Kato, H., 2008, ``Privatization and Government Preference," Economics Bulletin, 12, 1-7.
Keen, M. J. and C. Kotsogiannis, 2002,``Does Federalism Lead to Excessively High Taxes?" American Economic Review, 92, 363-370.
Kreps, D., 1990, Game Theory and Economic Modelling, New York: Oxford University Press.
Leahy, D. and C. Montagna, 2000, ``Unionisation and Foreign Direct Investment: Challenging Conventional Wisdom?" Economic Journal, 110, C80-C92.
Lommerud, K. E., F. Meland, and L. Sorgard, 2003,``Unionised Oligopoly, Trade Liberalisation and Location Choice," Economic Journal, 113, 782-800.
Matsumura, T. and Y. Tomaru, 2009,``Mixed Duopoly, Privatization and Subsidization with Excess Taxation Burden," Waseda University, G-COE GLOPE 2 Working Paper Series No. 19.
Matsushima, N. and T. Matsumura, 2006, ``Mixed Oligopoly, Foreign Firms, and Location Choice," Regional Science and Urban Economics, 36, 753-772.
Mujumdar, S. and D. Pal, 1998, ``Effects of Indirect Taxation in a Mixed Oligopoly," Economics Letters, 58, 199-204.
Myles, G., 2002, ``Mixed Oligopoly, Subsidization and the Order of Firms' Moves: An Irrelevance Result for the General Case," Economics Bulletin, 12, 1-6.
Naylor, R. A., 1998,``International Trade and Economic Integration when Labour Markets are Generally Unionised," European Economic Review, 42, 1251-1267.
Naylor, R. A., 1999,``Wage Union Strategies and International Trade," Economic Journal, 109, 102-125.
Oates, W. E., 1985, ``Searching for Leviathan: An Empirical Study," American Economic Review, 75, 748-757.
Oates, W. E., 1989, ``Searching for Leviathan: A Reply and Some Further Reflection," American Economic Review, 79, 578-583.
Oswald, A. J. and P. Turnbull, 1985, ``Pay and Employment Determination in Britain: What are Labour Contracts Really Like," Oxford Review of Economic Policy, 1, 80-97.
Poyago-Theotoky, J., 2001, ``Mixed Oligopoly, Subsidization and the Order of Firms' Moves: An Irrelevance Result," Economics Bulletin, 12, 1-5.
Saha, B., 2009, ``Mixed Ownership in a Mixed Duopoly with Differentiated Products," forthcoming in Journal of Economics.
Saha, B. and R. Sensarma, 2008, ``The Distributive Role of Managerial Incentives in a Mixed Duopoly," Economics Bulletin, 12, 1-10.
Straume, O. R., 2003, ``International Merger and Trade Liberalization: Implications for Unionized Labour," International Journal of Industrial Organization, 21, 717-735.
Tirole, J., 1994, ``The Internal Organization of Government," Oxford Economic Papers, 46, 1-29.
White, M. D., 2001, ``Managerial Incentives and the Decision to Hire Managers in Markets with Public and Private Firms," European Journal of Political Economy, 17, 877-896.
Willner, J., 1999, ``Policy Objectives and Performing in a Mixed Market with Bargaining," International Journal of Industrial Organization, 17, 137-145.
Willner, J., 2006,``A Mixed Oligopoly Where Private Firms Survive Welfare Maximization," Journal of Industry, Competition and Trade, 6, 235-252.
Wilson, J. Q., 1989, Bureaucracy: What Government Agencies Do and Why They Do It, New York, Basic Books.
Zax, J. S., 1989, ``Is There a Leviathan in Your Neighborhood?" American Economic Review, 79, 560-567.