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Profit-sharing, Bertrand competition and monopoly unions: a note

By Amrita Dhillon and Emmanuel Petrakis

Abstract

This paper studies a strategic aspect of profit-sharing in an oligopolistic industry with a monopoly union. Whenever a uniform profit share exists in the industry, we show that a union that values the per worker remuneration positively, may have incentives to reduce industry employment, decreasing thus total output and causing total profits to increase. Thus, we show that profit-sharing may lead to higher profits for such an industry even if productivity effects are absent

Topics: HD
Publisher: University of Warwick, Department of Economics
Year: 2001
OAI identifier: oai:wrap.warwick.ac.uk:1574

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