Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Investment and Technological Choice in a Right-to-Manage Model

Jean-François Fagnart and Marc Germain
Journal of Economics
Vol. 66, No. 3 (1997), pp. 223-247
Published by: Springer
Stable URL: http://www.jstor.org/stable/41794620
Page Count: 25
  • More info
  • Cite this Item
Investment and Technological Choice in a Right-to-Manage Model
Preview not available

Abstract

We analyze the interactions between investment and local wage bargaining in a putty–clay model where the investment decision commits the firm to a particular capital intensity. This technological precommitment is used strategically in order to manipulate the bargaining outcome. We show that this strategic behavior induces a nonmonotonic relationship between the capital and labor demands of the firm and most of its environmental parameters (e.g., the bargaining power of the union, its minimum wage requirement, the capital cost). The results we obtain in our putty–clay framework thus contradict several conclusions of the standard literature on wage bargaining and investment.

Page Thumbnails

  • Thumbnail: Page 
[223]
    [223]
  • Thumbnail: Page 
224
    224
  • Thumbnail: Page 
225
    225
  • Thumbnail: Page 
226
    226
  • Thumbnail: Page 
227
    227
  • Thumbnail: Page 
228
    228
  • Thumbnail: Page 
229
    229
  • Thumbnail: Page 
230
    230
  • Thumbnail: Page 
231
    231
  • Thumbnail: Page 
232
    232
  • Thumbnail: Page 
233
    233
  • Thumbnail: Page 
234
    234
  • Thumbnail: Page 
235
    235
  • Thumbnail: Page 
236
    236
  • Thumbnail: Page 
237
    237
  • Thumbnail: Page 
238
    238
  • Thumbnail: Page 
239
    239
  • Thumbnail: Page 
240
    240
  • Thumbnail: Page 
241
    241
  • Thumbnail: Page 
242
    242
  • Thumbnail: Page 
243
    243
  • Thumbnail: Page 
244
    244
  • Thumbnail: Page 
245
    245
  • Thumbnail: Page 
246
    246
  • Thumbnail: Page 
247
    247