Equilibrium involuntary unemployment under oligempory

Arbeitspapier

We show that equilibrium involuntary unemployment emerges in a multi-stage game model where all market power resides with firms, on both the labour and the output market. Firms decide wages, employment, output and prices, and under constant returns there exists a continuum of subgame perfect equilibria involving unemployment. A firm does not undercut the equilibrium wage since then high wage firms would attract its workers, thus forcing the low wage firm out of both markets. Full employment equilibria may also exist, but only the involuntary unemployment equilibria are robust to decreasing returns.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Reihe Ökonomie / Economics Series ; No. 68

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
• Subject: involuntary unemployment ; multi-stage game ; imperfect competition ; Arbeitslosigkeit ; Gleichgewichtstheorie ; Oligopol ; Theorie ; Unfreiwillige Arbeitslosigkeit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kaas, Leo ; Madden, Paul
• Event: Veröffentlichung
• (who): Institute for Advanced Studies (IHS)
• (where): Vienna
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/70294
• Last update: 10.03.2025, 11:44 AM CET