Strategic Delegation in Firms and in the Trade Union

by Guido S. Merzoni

Overview

Strategic delegation is a widespread phenomenon in economic and social systems. In many situations the main interested party benefits from appointing a delegate to take action that the principal - were he playing - could not credibly take. This book contributes to the literature studying such a phenomenon, by extending the analysis of its implications for firms' strategy in product markets, by investigating how it may affect the trade union's activity, by studying its dynamic influence on the evolution of strategic interactions that the delegating party is involved in. The welfare effects of strategic delegation turn out to be uncertain and crucially depend on the features of the situation considered, both in static and in dynamic frameworks.

Product Details

ISBN-13:	9783790814323
Publisher:	Physica-Verlag HD
Publication date:	05/07/2003
Series:	Contributions to Economics
Edition description:	Softcover reprint of the original 1st ed. 2003
Pages:	142
Product dimensions:	6.10(w) x 9.25(h) x 0.36(d)

Table of Contents

1 - Introduction.- 2 - Strategic delegation in firms competing underincomplete information.- 2.1 Strategic competition and the firm’s organisational design.- 2.2 A model of strategic delegation in duopoly with incomplete information.- 2.3 Equilibrium output and effort provision with strategic delegation.- 2.4 The effort provision under alternative settings.- 2.5 The case of linear demand.- 2.6 Conclusions.- Appendix 2.1. Proofs of Proposition 2.3 and of Lemma 2.6.- 3 - Delegation contracts’ observability and collusion.- 3.1 Introduction.- 3.2 Observability in delegation games.- 3.3 The benchmark model.- 3.4 Non-renegotiable contracts.- 3.5 One round of renegotiation.- 3.6 Delayed observability and renegotiation costs.- 3.7 Conclusions.- Appendix 3.1 - Proofs of Lemma 3.1 and of Corollary 3.7.- Appendix 3.2 - The computation of a collusive equilibrium.- 4 - Strategic delegation in the trade union.- 4.1 Introduction.- 4.2 The nature of the trade union: co-ordination costs and the delegation of authority.- 4.3 A model of bargaining with threats.- 4.4 Direct bargaining.- 4.5 Strategically delegated bargaining.- 4.6 Conclusions.- 5 - Competition for delegates and the evolution of market structure.- 5.1 New managers, technological innovation and industry evolution.- 5.2 A model of dynamic competition for managers.- 5.3 Catching-Up.- 5.4 Increasing Dominance.- 5.5 Market structure and returns to managers.- 5.6 Market size and product differentiation with DRM.- 5.7 Some welfare implications.- 5.8 Conclusions.- Appendix 5.1 - Programs for the simulations.- 6 - Conclusions.- References.- Declaration.- List of figures.- List of tables.