Bilateral delegation in duopoly wage and employment bargaining

Chatterjee, I.; Saha, B.

doi:10.1002/mde.2807

Bilateral delegation in duopoly wage and employment bargaining

Chatterjee, I.; Saha, B.

Authors

I. Chatterjee

Dr Bibhas Saha b.c.saha@durham.ac.uk
Associate Professor

Abstract

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.

Citation

Chatterjee, I., & Saha, B. (2017). Bilateral delegation in duopoly wage and employment bargaining. Managerial and Decision Economics, 38(4), 607-621. https://doi.org/10.1002/mde.2807

Journal Article Type	Article
Acceptance Date	Apr 5, 2016
Online Publication Date	May 27, 2016
Publication Date	Jun 1, 2017
Deposit Date	Apr 6, 2016
Publicly Available Date	May 27, 2018
Journal	Managerial and Decision Economics
Print ISSN	0143-6570
Electronic ISSN	1099-1468
Publisher	Wiley
Peer Reviewed	Peer Reviewed
Volume	38
Issue	4
Pages	607-621
DOI	https://doi.org/10.1002/mde.2807
Public URL	https://durham-repository.worktribe.com/output/1384645

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Copyright 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 https://doi.org/10.1002/mde.2807. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.