Managers´ incentives to invest in firms´ specific activities (internal investments) are compared with those to realize activities to increase their alternative market opportunities (external investments) when a managerial contract establishes a large breach penalty in the event of employment...

In this paper we study how managerial delegation schemes in a duopoly product market interact with wage decisions taken by a monopoly central (industry-wide) union in the labour market. We analyse a model where, at the first stage, firms’ owners optimally choose for their managers a delegation...

In this paper we offer a critical discussion about the concept of labour market rigidity in the light of recent theoretical approaches that have aimed to provide sound micro-foundations to the presence of unemployment in market economies. We point out that the concept of labour market rigidity...

This paper aims at investigating if the conventional wisdom, that a decrease in the degree of product differentiation (which implies increasing competition) always reduces firms’ profits, remains true in a differentiated duopoly model with decentralized, or firm-specific, monopoly unions. In...

This paper compares Cournot and Bertrand equilibria in a differentiated duopoly, total wage bill maximizing unions and labour decreasing returns. It is shown that the standard result, that equilibrium profits are always higher under Cournot, may be reversed even for a fairly low degree of...

In this paper I analyse contracts which motivate workers to invest in on-the-job "general" training in a context of strategic bargaining and labour market imperfections (e.g., turnover, search and switching costs). While the "hold-up" literature mainly restricted attention to investments that...

This work aims to investigate if the conventional wisdom, that a decrease in the degree of product differentiation always reduces firms’ profits, remains true in a differentiated duopoly model with decentralized, or firm-specific, monopoly unions. It is shown that, provided that unions are...

The article presents a critical review of the advances made in incentive-based and knowledge-based theories of the firm. In particular, the authors explore some developments in the incentive-based approach regarding relational contracts and contracts as "reference points", while the evolution of...