Production externality and productivity of labor.

In this paper we consider two imperfectly competitive industries, with the polluting emissions from one industry harming the productivity of labor in the other. The polluting industry has to pay an environmental tax chosen by the government. In this framework, we analyze how the different organizational structure adopted by workers affect the environmental tax set by the government, total pollution emissions from the polluting industry and the productivity of workers in the industry that suffers the externality. We obtain that this depends on the degree to which pollution emissions from the polluting industry affects the marginal product of labor in the other industry.Production externality, productivity of labor, environmental taxes, imperfect competition, unionized labor.

Entrada y negociaciones salariales que abarcan varios períodos

Las empresas, por motivos estratégicos, pueden estar interesadas en fomentar negociaciones salariales con los trabajadores que abarcan varios períodos temporales, en vez de negociar período a período, ya que de este modo pueden lograr ventajas sobre los rivales.Strategic reasons may imply that firms prefer long-term wage bargaining with workers (two periods) instead of short-term wage bargaining (one period), since it could imply advantages over rivals

Endogenous Timing in a Mixed Duopoly: Wighted Welfare and Price Competition

In this paper we analyse the endogenous order of moves in a mixed duopoly for differentiated goods. Firms choose whether to set prices sequentially or simultaneously. The private firm maximises profits while the public firm maximises the weighted sum of the consumer and producer surpluses (wighted welfare). It is shown that the result obtained in equilibrium depends crucially on the weigth given to the consumer surplus in weighted welfare and on the degree to which goods are substitutes or complements. We also anlyse whether the equilibria obtained maximise the sum of the consumer and producer suspluses or not. Finally we study whether the nationality of the private firm influences the results.mixed duopoly, price competition, endogenous timing, weighted welfare

Cost-Saving production technologies and strategic delegation

This work analyzes a managerial delegation model in which firms that produce a differentiated good can choose between two production technologies: a low marginal cost technology and a high marginal cost technology. For the former to be adopted more investment is needed than for the latter. By giving managers of firms an incentive scheme based on a linear combination of profit and sales revenue, we find that Bertrand competition provides a stronger incentive to adopt the cost-saving technology than the strict profit maximization case. However, the results may be reversed under Cournot competition. We show that if the degree of product substitutability is sufficiently low (high), the incentive to adopt the cost-saving technology is larger under strict profit maximization (strategic delegation).strategic delegation, duopoly, cost saving production technologies

Partial cross-ownership and strategic environmental policy

This paper analyzes the effect that passive investment in rival firms has on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, one of which owns a stake in its rival. We show that partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. Depending on the stake that one firm has in its rival we show that cooperative taxes may he higher or lower than non-cooperative taxes. Moreover, for intermediate values of the stake, the non-cooperative tax is higher in one country and lower in the other than the cooperative tax.environmental taxes, international trade, local pollution, partial ownership

Choice of Flexible Production Technologies Under Strategic Delegation

This work analyzes a managerial delegation model in which firms can choose between a flexible production technology which allows them to produce two different products and a dedicated production technology which limits production to only one product. We analyze whether the incentives to adopt the flexible technology are smaller or greater in a managerial delegation model than under strict profit maximization. We obtain that the asymmetric equilibrium in which only one firm adopts the flexible technology can be sustained under strategic delegation but not under strict profit maximization when products are substitutes. We extend the analysis to consider welfare implications.flexible production technologies, strategic delegation, social welfare, duopoly

Should Owners of Firms Delegate Long-run Decisions?

This paper analyzes whether owners of firms have incentives to delegate their long-run decisions to managers or not. The result arising from our analysis shows that owners do have incentives to keep their long-run decisions (the location of the firm) to themselves. In this context we show that the delegation of short-run decisions (prices) to the managers leads to an increase in the degree of product differentiation with regard to the case in which firms do not hire managers.managerial incentives, strategic delegation, product differentiation

Timing of Wage Setting when Firms Invest in R&D

Also published as Working Paper Ikerlanak 2003-08unions, R&D, productivity of labor, wage setting

International Trade and Strategic Privatization

The literature on mixed oligopoly does not consider that there is strategic interaction between governments when they decide whether to privatize their public firms. In order to analyze this quetion we consider two countries; In each country there is one public firm and n private firms. Firms have a constant marginal cost of production and the public firm is less efficient than the private firms. In this framework, we show that when the marginal cost of the public firms takes an intermediate value only one government privatizes its public firm and that government obtains a lower social welfare than the other.international trade, public firms, privatization

Environmental Standards, Wage Incomes and the Location of Polluting Firms

The purpose of this paper is to study how the choice of environmental standards by governments is affected by the existence of wage incomes when firms' location is endogenous. In developed countries labor is unionized, which allows positive wage incomes to arise. Thus, each government has incentives to persuade firms to locate in its country since its social welfare depends on such incomes. But, as pollution damages the environment, each government will try to persuade polluting firms to locate in its country to obtain the wage incomes only when its valuation of environmental damage shows that it is low.environmental standards, firms' location, wage incomes