Bargaining and the timing of investment
UNSPECIFIED. (1997) Bargaining and the timing of investment. INTERNATIONAL ECONOMIC REVIEW, 38 (3). pp. 527-546. ISSN 0020-6598Full text not available from this repository.
The joint determination of the timing of investment and wage bargaining is modelled. Two cases are considered: (a) There is an alternating-offer bargaining game over binding wage contracts and production is possible only when agreement is reached. (b) There are no binding contracts so revenue is divided in period-by-period bargaining post-investment. Investment can occur earlier in case (b) than in case (a) and the equilibrium in case (b) can Pareto-dominate the equilibrium with binding contracts. These conclusions depend on players' discount factors.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Journal or Publication Title:||INTERNATIONAL ECONOMIC REVIEW|
|Number of Pages:||20|
|Page Range:||pp. 527-546|
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