Wage bargaining and vertical differentiation

Bacchiega, Emanuele

doi:10.1007/s12232-007-0005-6

Cited by 9 publications

(8 citation statements)

References 28 publications

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“…The largest part of the literature on vertical differentiation has considered partial equilibrium models with consumers on one side and firms on the other (Amir, Jin, Pech, & Tröge, ; Anderson, de Palma, & Thisse, ; Choi & Shin, ; Li & Zhang, ; Mussa & Rosen, ; Wauthy, ). Workers have been integrated in a less abundant literature highlighting the role of skills in the product's quality (Bacchiega, ; Gabszewicz & Turrini, , ; Hili, Lahmandi‐Ayed, & Lasram, ). But even these papers consider partial equilibrium models with separate categories of agents (firms, workers, and consumers).…”

Section: Introductionmentioning

confidence: 99%

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

Kahloul

Lahmandi-Ayed

Lasram

et al. 2017

J Public Economic Theory

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We consider a general equilibrium model with vertical preferences and one or two firms, where workers and consumers are differentiated, respectively, by their sensitivity to effort and their preference for quality. The question in this paper is whether a decentralized choice through majority vote would lead to more or less competition. We compare the duopoly and the monopoly cases from the viewpoint of each individual, then we deduce the choice of the majority. We prove that, under concentrated ownership (where owners have a null density), duopoly is always preferred by the majority; while under egalitarian ownership (where firms are equally shared by all the population), the choice of the majority depends on the relative size of workers' and consumers' segments.

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Section: Introductionmentioning

confidence: 99%

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

Kahloul

Lahmandi-Ayed

Lasram

et al. 2017

J Public Economic Theory

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“…We adopt Gabszewicz and Turrini (2000) approach as for the relationship between availability of skilled labor and the possibility of producing high-quality goods, but we modify it as in Bacchiega (2007) to account for the non-competitive nature of the market for skilled labor. Indeed, Gabszewicz and Turrini (2000) assume a competitive wage setting for the skilled work force.…”

Section: Introductionmentioning

confidence: 99%

Wage Bargaining, Vertical Differentiation and Intra-Industry Trade Liberalization

Bacchiega¹

2013

Recherches Économiques De Louvain

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Distribution électronique Cairn.info pour De Boeck Supérieur. © De Boeck Supérieur. Tous droits réservés pour tous pays. La reproduction ou représentation de cet article, notamment par photocopie, n'est autorisée que dans les limites des conditions générales d'utilisation du site ou, le cas échéant, des conditions générales de la licence souscrite par votre établissement. Toute autre reproduction ou représentation, en tout ou partie, sous quelque forme et de quelque manière que ce soit, est interdite sauf accord préalable et écrit de l'éditeur, en dehors des cas prévus par la législation en vigueur en France. Il est précisé que son stockage dans une base de données est également interdit.

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“…The authors endogenize the decision whether to acquire skills , but the skill level remains exogenous. In a related paper, Bacchiega () analyses a non‐competitive labour market and applies the Nash bargaining solution to determine the skilled workers’ wage. In this paper, however, the process of skill acquisition is exogenous.…”

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Training and Product Quality in Unionized Oligopolies

Bacchiega

Minniti

2015

Economica

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In this paper we analyze the private and public incentives towards skill acquisition when the skill level of workers determines the quality level of goods, and both labor and product markets are non competitive. We delve into the mechanisms that determine the equilibrium skill acquisition outcomes and show that both "pure" (training set by either firms or unions only) and "mixed" (training set by firms and unions) training scenarios may emerge at equilibrium. We show that firms have generally greater training incentives than unions, resulting in a higher product quality. In line with empirical evidence, we also find that the wage differential between high-skill workers and low-skill workers is lower when the training levels of the workforce are selected by unions than by firms. Finally, we analyze the optimal public training skill levels and demonstrate that both unions and firms under-invest in training in comparison with the social optimum. Yet, in this case the skill premium is the lowest.

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Wage bargaining and vertical differentiation

Cited by 9 publications

References 28 publications

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

Wage Bargaining, Vertical Differentiation and Intra-Industry Trade Liberalization

Training and Product Quality in Unionized Oligopolies

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