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Welfare effects of cross-ownership in a unionised duopoly
Titolo Rivista: ECONOMIA E POLITICA INDUSTRIALE  
Autori/Curatori: Luciano Fanti 
Anno di pubblicazione:  2014 Fascicolo: Lingua: Inglese 
Numero pagine:  21 P. 21-41 Dimensione file:  201 KB
DOI:  10.3280/POLI2014-002002
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The present study analyses the effects of an increase in the share of one-sided cross-ownership in a Cournot duopoly with firm-specific monopolistic unions. Since the cross-participation at ownership level implies a lower degree of competition, then in a duopoly without unions, as expected, consumer surplus and social welfare, despite the increase in the industry profits, are reduced when cross-participation increases. By contrast, when the labour market is unionised, I show the counterintuitive result that, despite the degree of competition is reduced by cross-ownership, both consumer surplus and social welfare increase with the share of cross-participation. This always occurs provided that unions are sufficiently wage-oriented. Moreover, it is shown that the results are also robust to the Bertrand mode of competition. Therefore, the policy implication is that, when wage-interested unions are in existence in oligopoly industries, a rise in cross-participation - i.e. a lower degree of competition - is socially preferred.


Keywords: Proprietà incrociata, duopolio, sindacato, benessere sociale
Jel Code: D43, L13, L4, J51

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  1. Luciano Fanti, Social welfare and cross-ownership in a vertical industry: When the mode of competition matters for antitrust policy in Japan and the World Economy /2016 pp. 8, DOI: 10.1016/j.japwor.2016.02.004
  2. Domenico Buccella, A Simple Model for the Integration of Goods and the Capital Market with Unionized Labor Markets in Ekonomika /2019 pp. 19, DOI: 10.15388/Ekon.2019.1.2
  3. Domenico Buccella, Unionized duopoly, market competition with differentiated products, and welfare in Economia e Politica Industriale /2015 pp. 455, DOI: 10.1007/s40812-015-0018-1
  4. Luciano Fanti, Partial Cross-Ownership, Cost Asymmetries, and Welfare in Economics Research International /2015 pp. 1, DOI: 10.1155/2015/324507
  5. Junlong CHEN, Hao TANG, Jiali LIU, Duopoly, Optimal Proportion of State-Owned Shares and International Cross-Ownership in Revista de Cercetare si Interventie Sociala /2019 pp. 352, DOI: 10.33788/rcis.64.26

Luciano Fanti, in "ECONOMIA E POLITICA INDUSTRIALE " 2/2014, pp. 21-41, DOI:10.3280/POLI2014-002002

   

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