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Bilateral delegation in duopoly wage and employment bargaining.

Chatterjee, I. and Saha, B. (2017) 'Bilateral delegation in duopoly wage and employment bargaining.', Managerial and decision economics., 38 (4). pp. 607-621.


We study bilateral delegation in wage and employment bargaining between firms and unions in a Cournot duopoly. Incentive delegation creates frictions for each party between its objectives of within-firm rent extraction and market/job stealing from the rival firm. The net effect is restraint in production, resulting in a larger bargaining pie. But each player's payoff will be inversely related to his bargaining power. We also show that if players are given a choice to delegate, they will not resort to delegation when their bargaining power is sufficiently high. This is in contrast to the scenarios commonly assumed in many models.

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Publisher statement:This is the accepted version of the following article: Chatterjee, I., and Saha, B. (2017). Bilateral delegation in duopoly wage and employment bargaining. Managerial and Decision Economics, 38(4): 607-621, which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Record Created:06 Apr 2016 16:05
Last Modified:27 May 2018 00:41

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