Product market competition, profit sharing and equilibrium unemployment

Arbeitspapier

We investigate the implications of product market imperfections on profit sharing, wage negotiation and equilibrium unemployment. The optimal profit share, which the firms use as a wage-moderating commitment device, is below the bargaining power of the trade union. Intensified product market competition decreases profit sharing, but increases the negotiated base wage, because the wage-increasing effect of reduced profit sharing dominates the wage-reducing effect associated with a higher wage elasticity of labor demand. Finally, we show that intensified product market competition does not necessarily reduce equilibrium unemployment, because it induces both higher wage mark-ups and lower optimal profit shares.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 1603

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Trade Unions: Objectives, Structure, and Effects ; Compensation Packages; Payment Methods
• Thema: product market competition ; profit sharing ; wage bargaining ; equilibrium unemployment ; Tarifliche Gewinnbeteiligung ; Lohnverhandlungstheorie ; Wettbewerb ; Theorie der Arbeitslosigkeit ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Koskela, Erkki ; Stenbacka, Rune
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/19067
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ