Question

By analogy to Bertrand's model of duopoly, suppose that two employers take each other's wage as given and believe that all workers will seek employment with the firm that offers the higher wage. What level of wages and employment would you expect to result?

   By analogy to Bertrand's model of duopoly, suppose that two employers take each other's wage as given and believe that all workers will seek employment with the firm that offers the higher wage. What level of wages and employment would you expect to result?
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Microeconomics: Optimization, Experiments, and Behavior
Microeconomics: Optimization, Experiments, and Behavior
John P. Burkett 1st Edition
Chapter 15, Problem 4 ↓

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In this scenario, we have two employers (firms) competing for workers by offering wages. Each employer assumes that workers will choose to work for the firm offering the higher wage. This setup is analogous to Bertrand competition in economics, where firms compete  Show more…

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By analogy to Bertrand's model of duopoly, suppose that two employers take each other's wage as given and believe that all workers will seek employment with the firm that offers the higher wage. What level of wages and employment would you expect to result?
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