Market Integration and Strike Activity

We consider a two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigate the effects of separated product markets opening up for competition as well as of further market integration on the negociated wage and the maximum delay in reaching an agreement. From an initial situation of reciprocal intra-industry trade, an increase in product market integration will decrease the maximal delay in reaching an agreement. However, markets opening up for competition have an ambiguous effect on both the wage outcome and the maximum real delay time in reaching an agreement.economic integration; product market competition; wage bargaining; strike activity

A Characterization of Stochastically Stable Networks

Jackson and Watts [J. of Econ. Theory 71 (2002), 44-74] have examined the dynamic formation and stochastic evolution of networks. We provide a refinement of pairwise stability, p-pairwise stability, which allows us to characterize the stochastically stable networks without requiring the "tree construction" and the computation of resistance that may be quite complex. When a 1/2-pairwise stable network exists, it is unique and it coincides with the unique stochastically stable network. To solve the inexistence problem of p-pairwise stable networks, we define its set-valued extension with the notion of p-pairwise stable set. The 1/2-pairwise stable set exists and is unique. Any stochastically stable network is included in the 1/2-pairwise stable set. Thus, any network outside the 1/2-pairwise stable set must be considered as a nonrobust network. We also show that the 1/2-pairwise stable set can contain no pairwise stable network and we provide examples where a set of networks is more "stable" than a pairwise stable network.Network formation, Pairwise stability, Stochastic stability

International R&D Collaboration Networks

We reconsider Goyal and Moraga-Gonzalez (Rand J. of Econ. 32 (2001), 686-707) model of strategic networks in order to analyze how government policies (e.g. subsidies) will affect the stability and efficiency of networks of R&D collaboration among three firms located in different countries. A conflict between stability and efficiency is likely to occur. When governments cannot subsidize R&D, this conflict will occur if public spillovers are not very small. However, when governments can subsidize R&D, the likelihood of a conflict is considerably reduced. Indeed, a conflict will arise only if public spillovers are very small or quite large.Network; R&D collaboration; Subsidy

Bargaining with Endogenous Deadlines

We develop a two-person negotiation model with complete information which makes endogenous both the deadline and the level of surplus destruction after the deadline. We show that the equilibrium outcome is always unique but might be inefficient. Moreover, as the bargaining period becomes short or as the players become very patient, the unique outcome is always inefficientbargaining;alternating-offers;deadlines;complete infomation

Product Market Integration, Wage Bargaining and Strike Activity

We develop a spatial two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigage the effects of separated product markets opening up for competition as well as of further market integration on the negotiated wage and the strike activity. We show that, when product markets are separated, the wage level and the strike activity are decreasing with the transportation cost and the home market size. However, when markets are integrated, wages and strikes are now increasing with the transportation cost. Finally, we find that the opening of markets for competition has an ambiguous impact on both the negotiated wage and the strike activity.economic integration;horizontal differentiation;product market competition;wage bargaining;strike activity

Union Delegation and Incentives for Merger

We analyze a unionized duopoly model to examine how unions affect the incentives for merger. We find that, once the union has the option to delegate, an increase in the union bargaining power can create incentives for the firms to merge.Union delegation;Wage bargaining;Mergers

Strategic Union Delegation and Strike Activity

We develop a model of wage determination with private information, in which te union has the option to delegate the wage bargaining to either surplus-maximizing delegates or to wage-maximizing delegates (such as senior union members). We show that the strike activity is greater whenever the union chooses wage-maximizing delegates instead of surplus-maximizing delegates. We also provide the necessary and sufficient condition such that it is always optimal for the union to choose wage-maximizing delegates and we we find that the efficiency loss due to strategic delegation may be quite important.Union delegation;Wage bargaining;Private information;Strike activity

Market integration in network industries

What is the effect of product market integration on the market equilibrium in the presence of international network externalities in consumption? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.compatibility, horizontal differentiation, network effect

Market integration in network industries

What is the effect of product market integration on the market equilibrium in the presence of international network externalities in consumption? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.

Von Neuman-Morgenstern farsightedly stable sets in two-sided matching

We adopt the notion of von Neumann-Morgenstern farsightedly stable sets to predict with matchings are possibly stable when agents are farsighted in one-to-one matching problems. We provide the characterization of von Neumann-Morgenstern farsightedly stable sets : a set of matchings is a von Neumann-Morgenstern farsightedly stable set if and only if it is a singleton set and its element is a corewise stable matching. Thus, contrary to the von Neumann-Morgenstern (myopically) stable sets, von Neumann-Morgenstern farsightedly stable sets cannot include matchings thar are not corewise stable ones. Moreover, we show that our main result is robust to many-to-one matching problems with responsive preferences.matching problem, von Neumann-Morgenstern stable sets, farsightedly stability