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Aims to analyse the labour market outcome when there are two unions in the industry, representing heterogeneous workers – imperfect substitutes in production.
Abstract
Purpose
Aims to analyse the labour market outcome when there are two unions in the industry, representing heterogeneous workers – imperfect substitutes in production.
Design/methodology/approach
Competition between union policies are viewed in terms of both employment and wage strategies. Results for substitutes and complements are inspected. Attention is given to the strategic behaviour of the unions, towards one another and/or the employer side. Cooperation is modelled using the Nash‐maximand approach.
Findings
Gathers some notes and enlargements to the standard collective bargaining problem in which unions maximise utility. Extends the framework to model union competition behaviour for jobs and/or employment that reproduces the standard market product analysis of imperfect competition. Focuses on heterogeneous labour.
Research limitations/implications
The analysis concentrates on the case of union duopoly, but can easily be enlarged to the n‐union setting – which is left for further investigation.
Originality/value
A simple analytical example with Stone‐Geary union utility functions and a linear labour demand system is forwarded.
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Keywords
Rofin T.M. and Biswajit Mahanty
The purpose of this paper is to investigate the impact of price adjustment speed on the stability of Bertrand–Nash equilibrium in the context of a dual-channel supply chain…
Abstract
Purpose
The purpose of this paper is to investigate the impact of price adjustment speed on the stability of Bertrand–Nash equilibrium in the context of a dual-channel supply chain competition.
Design/methodology/approach
The paper considers a dual-channel supply chain comprising a manufacturer, a traditional retailer and an online retailer. A two-dimensional discrete dynamical system is used to examine the Bertrand competition between the retailers. The retailers are assumed to follow bounded rational expectations. Local stability of Bertrand–Nash equilibrium is investigated with respect to the price adjustment speed.
Findings
As the price adjustment speed increases, the stability of Bertrand–Nash equilibrium is lost, leading to complex chaotic dynamics. The results showed that chaotic dynamics deteriorates the profit of the retailers. The authors also found that the chaos can be controlled using an adaptive adjustment mechanism and the retailers enjoy higher profit when the chaos is controlled.
Practical implications
This study helps retail managers to choose an appropriate price adjustment speed to maximize profit.
Originality/value
The heterogeneity of the retailers is not considered in the studies involving dynamics of retailer competition. This paper contributes to the literature by considering the operational difference between a traditional retailer and an online retailer, i.e. price adjustment speed. In addition, the study establishes a link between price adjustment speed and profit.
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Keywords
The purpose of this paper is to analyse the labor market outcome when there are two unions in the industry, representing heterogeneous workers – substitutes or complements in…
Abstract
Purpose
The purpose of this paper is to analyse the labor market outcome when there are two unions in the industry, representing heterogeneous workers – substitutes or complements in production – and using wage strategies, in the presence of minimum wage regulation.
Design/methodology/approach
Three strategic environments are considered: symmetric Bertrand‐Nash duopoly, Stackelberg duopoly, and efficient cooperation between the two unions.
Findings
Usually, minimum wage legislation (floor) would decrease employment; it is shown that in Stackelberg environment, minimum wage legislation may induce an increase in total employment. Wage‐pushing strategies by a leader may also arise; and if workers are substitutes, entry deterrence strategies by the leader may be observed.
Originality/value
This paper analyses the impact of minimum wages in duopoly scenarios in an extensive way.
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Keywords
Ge Zhu, Shan Ao and Jianhua Dai
Switching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research has…
Abstract
Purpose
Switching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research has already examined the formation and influence of switching costs on the consumers' repeated purchase intentions, but little research has focused on quantitative measurement of the switching cost itself. This paper aims to address this issue.
Design/methodology/approach
By game theory, a complete Nash‐Bertrand model is proposed to accurately estimate consumer switching costs considering price compensation and transport costs in a duopoly. The relationship between switching costs and market structure is then analyzed by using the example of Hong Kong's wireless telecommunication market. From the observed data of China's wireless telecommunication industry, the model calculates switching costs per year of China Mobile and China Unicom's users respectively, as well as other variables.
Findings
The results demonstrate that reducing consumer switching costs will benefit small operators and increase competition in a winner‐take‐all market.
Originality/value
The model is valuable in calculating unseen switching costs and studying the impact of switching costs on market structure, especially for a duopoly in telecommunication.
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Saied Farham-Nia and Alireza Ghaffari-Hadigheh
The aim of this paper is to study the optimal pricing decision in a supply chain with a dual distribution channel in a centralized and decentralized decision-making systems and…
Abstract
Purpose
The aim of this paper is to study the optimal pricing decision in a supply chain with a dual distribution channel in a centralized and decentralized decision-making systems and investigate the economic impact of retail services on pricing behaviors with respect to the power structures.
Design/methodology/approach
To reach the equilibrium behavior of decision-makers, two-stage optimization, the Stackelberg game and the Bertrand–Nash game have been used. Also, to explore the effect of environmental uncertainty on the behavior of decision-maker, demand functions are characterized as an uncertain price dependent, service dependent and channel dependent. Decision parameters are based on experts’ belief degree, in the sense of uncertainty theory initiated by Liu (2007).
Findings
Obtained results reveal that the retail services have a strategic role in the centralized supply chain and the decentralized supply chain with dominant manufacturer, while both the supply chain and the consumer suffer from higher environmental indeterminacy.
Research limitations/implications
This study is based on possible scenarios of dual distribution system only. Further research is recommended to investigate the applicability of the authors framework in different distribution systems.
Practical implications
The study findings are believed to be valuable for supply chains and organizations about to make a strategic decision on price of their good/service.
Originality/value
The paper contributes to the scarce literature on Uncertainty Theory initiated by Liu (2007), and combination of it with Game Theory for pricing in distribution system of supply chains. The study also contributes by investigating impact of non-price competitive factor (level of service) on pricing strategy.
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Carlo Russo and Mariarosaria Simeone
The purpose of this paper is to devise and then test a theoretical model to illustrate the effects of the increasing importance of social media on consumer behavior and market…
Abstract
Purpose
The purpose of this paper is to devise and then test a theoretical model to illustrate the effects of the increasing importance of social media on consumer behavior and market equilibrium in differentiated food industries.
Design/methodology/approach
The authors use game theory to model the strategic use of social media by firms producing high-value food products. The authors test the predictions of the theoretical model by means of a survey of 722 randomly selected Italian food consumers using an online questionnaire.
Findings
The model predicts that, as social media become more and more influential, consumers using the new media become more informed, and their concern about food quality attributes increases. At the same time, the consumers using mass media only receive less information and they prefer cheaper products to the high value one. As a result, the emergence of social media favours market segmentation and the hypotheses tested were: Social consumers are, on average, more informed than mass consumers and more concerned about environmental issues than mass consumers. The data support the theoretical model.
Originality/value
The paper contributes to the debate about the impact of information from interested sources on market equilibrium, providing an innovative analysis of the role of social media.
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Keywords
This paper shows that consumer preference heterogeneity affects whether multinational firms serve local markets via imports or local production. Firms are least likely to choose…
Abstract
This paper shows that consumer preference heterogeneity affects whether multinational firms serve local markets via imports or local production. Firms are least likely to choose local production over imports for product varieties that have relatively inelastic demand because transport costs have a smaller impact on the firm’s local profits for these products. The results suggest that there is complementarity between centralized production, with local market access via imports, and strategies that maintain low price elasticities at the brand level, such as advertising and within-brand product proliferation. A partial equilibrium study of the laundry detergent industry in Western Europe illustrates how firms and consumers interact at different levels of transport costs and reveals the product varieties that are most and least likely to be manufactured locally when transport costs are high.
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