A MODEL OF MONOPOLISTIC COMPETITION WITH PERSONAL INCOME DISPERSION

We introduce non‐homothetic preferences in the Dixit–Stiglitz model of monopolistic competition, and enquire about the effects of a change in income dispersion on the firms’ optimal decisions and market equilibrium. Income dispersion, modeled as a mean preserving spread, is shown to affect only the degree of product differentiation under the standard negligibility hypothesis on the firms’ decision making process, while it generates a positive co‐movement of demand and demand elasticity, when this assumption is removed and the price index effect is taken into account.     

Income concentration and market demand

We analyze the effects of income concentration and income dispersionon market demand and its elasticity. We show that, followingan increase in income concentration towards the middle (measuredby variations in mean preserving spread), the increase in demandfaced by firms which serve at the margin middle income consumers,is associated with an increase in price elasticity—accordingly,the positive effects of the size of the market becoming widerare amplified by a higher degree of competition. Our resultshold for a large number of possible income distributions.     

Straight to the Core — Explaining Union Responses to the Casualization of Work: The IG Metall Campaign for Agency Workers

The existing literature provides different accounts on the strategies of unions regarding marginal workers. It has been argued that under increasing labour market segmentation, unions have either to prioritize their core constituencies and to seek compromises with management, or to adopt inclusive strategies towards peripheral workers to counterbalance eroding bargaining power. This article shows that both strategies represent equally viable options to protect the interests of unions' core members. The strategic choice depends on the (perceived) competition between core and peripheral employees related to employers' personnel strategies; this affects the possible alignment of interests between unions' core members, on the one hand, and either management or peripheral employees, on the other. Our historical analysis of union strategies towards agency workers in the German metal sector illustrates this mechanism, and identifies institutional change towards liberalization as the trigger for aggressive segmentation strategies by employers and for inclusive union strategies.     

Optimal manipulation rules in a mixed oligopoly

We study the optimal manipulation rules of a public firm’s objective function in a mixed oligopoly with imperfect product substitutability. We start with a baseline duopoly model and compare the solutions under quantity and price competition, and the way they are affected by product substitutability. This allows us to show that partial privatization, strategic delegation and other specific government’s commitments on the objective function of the public management can be looked at as special cases of these optimal rules, and to evaluate the viability of these policies under the two modes of competition. In this framework, we also discuss the equivalence between manipulation of the objective function and Stackelberg leadership. Since optimal manipulation rules change as new dimensions are added, we also derive the optimal rules under oligopoly, quadratic costs, and competition of international firms. This fairly general unified framework allows to discuss the impact of these factors on the government’s implementation policies of the optimal manipulation rules.     

VERTICAL DIFFERENTIATION AND THE DISTRIBUTION OF INCOME

The paper analyses the effects of income concentration on the behaviour of a duopoly with vertical product differentiation and uncovered market. By using a trapezoid distribution, we solve explicitly for market equilibrium as a function of a mean preserving spread of the income distribution. We show that overall more concentrated incomes imply stronger product differentiation, as the presence of a large share of middle‐income consumers stimulates a price competition, whose effects are dampened through an enlargement of the quality spread. While the high‐quality advantage and market coverage increase unambiguously in the degree of income concentration, the behaviour of prices is non‐monotone in the distribution parameter.     

Personal Income Distribution and Market Structure

Income distribution affects market demand and its elasticity, and, as a consequence, the optimal behaviour of firms and market equilibrium. This paper focuses on the effects of income polarization, and presents a model where – for any unimodal density function describing income distribution of the consumers – income polarization leads to market concentration, i.e., to a smaller number of firms able to survive in the long run, provided that the firms' fixed costs are sufficiently low.     

Income Distribution and Monopoly: Price and Quantity Patterns with Intra‐ and Inter‐class Income Dispersion

We analyze the direction of the co‐movements of price and output in a monopolistic market when an expansive shock occurs. Price and quantity patterns are shown to depend on the consumers' income distribution. In particular, a low degree of income dispersion is associated with price and quantity reacting in opposite directions to demand shocks.     

Varieties of workplace dualisation: a study of agency work in the German automotive industry

This article investigates the variation in workplace arrangements on agency work across four German automotive plants. The plants differ in terms of the proportion of agency workers, the length of their assignment, their function and their wage level compared with the permanent workforce. The article explores how the interaction between national‐level deregulation, workplace power resources and the local political and economic context affects the bargaining outcomes achieved by works councils. Findings rely on interviews with human resource managers and labour representatives at workplace and sectoral level.     

Income Distribution in Network Markets

We enquiry about the effects of first and second order stochastic dominance shifts of the distribution of the consumers’ willingness to pay, within the standard model of a market with network externalities and hump-shaped demand curve. This issue is analyzed in the polar cases of perfect competition and monopoly. We find that, while under perfect competition both types of distributional changes result in higher output, provided marginal costs are low enough, in the monopoly case the final outcome depends on the way income distribution and the network externality interact in determining market demand elasticity.