Location of Repository

Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly

By Kangsik Choi

Abstract

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.

Topics: C79 - Other, L13 - Oligopoly and Other Imperfect Markets, J51 - Trade Unions: Objectives, Structure, and Effects, D43 - Oligopoly and Other Forms of Market Imperfection, L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out, H44 - Publicly Provided Goods: Mixed Markets
Year: 2009
OAI identifier: oai:mpra.ub.uni-muenchen.de:17221

Suggested articles

Preview


To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.