Firms in socialist and transitional economies are often obliged to provide a social good in addition to a private good, which makes it difficult for a government to commit not to bail out the firm once it is in financial trouble. This creates a soft budget constraint syndrome which causes the...

In this paper we specify and estimate a structural model which links product market competition and union power. The model has a two-stage setting in which wages are determined through bargaining between management and unions in the first stage, with a price-setting market game to follow in the...

In this paper, we specify and estimate a structural model, which links product market competition and union power. The model has a two-stage setting, in which wages are determined through bargaining between management and unions in the first stage, with a price-setting market game to follow in...

This paper allows for endogenous costs in the estimation of price cost margins. In particular, we estimate price-cost margins when firms bargain over wages. We extent the standard two-equation set-up (demand and first-order condition in the product market) to include a third equation, which is...

This paper studies how a separation of ownership and management affects firms' R&D and production decisions in Cournot quantity competition. It is found that when R&D spillovers are small, owners strategically direct their managers away from profit maximization towards sales. Consequently,...

This paper studies the importance of politician's qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2,031 German municipalities for which we have collected information on municipal budgets as well as the election results and...