Endogenous codetermination

This research introduces endogenous codetermination in a Cournot duopoly. Unlike the received literature (Kraft, 1998), this work assumes that firms bargain with their own union bargaining units under if and only they can choose an ad hoc effort by maximising profits (three-stage non-cooperative game). There are remarkable differences compared main findings of exogenous literature. Indeed, there may exist asymmetric multiple (Pareto efficient) Nash equilibria pure strategies. Mandatory codetermination, therefore, is Pareto worsening. Each firm then use power as strategic device setting.