Wage Bargaining and Managerial Incentives
8 Pages Posted: 9 Aug 2005
Date Written: June 1, 2005
If managers bargain with workers over wage before choosing output in a Cournot duopoly, owners face two conflicting interests in designing managerial incentives: one for profit orientation to reduce wage, and the other for sales orientation to gain in output competition. The net effect depends on the workers' bargaining power.
Keywords: Bargaining, managerial incentives, sales orientation
JEL Classification: L12, L14, D43
Suggested Citation: Suggested Citation