Full text : Economic essays

110 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK
which would be below the point which the change in bargaining
powers had immediately effected.
Conversely, if the smaller and negatively inclined factor were
to improve its position by becoming less negatively elastic or by
shifting its whole supply curve to the left, then the attendant percentage
 gain per unit which it secured would be greater than the
loss per unit suffered by the rival and positive factor. Its supply
would, therefore, tend to contract more rapidly as compared with
the positive factor than would be the case were the factors to
receive equal shares, for then the positive factor would decrease
with equal rapidity. Consequently, the ultimate unit return to
the negative factor would be greater than it would have been
under the condition of equal shares. When the negative factor
therefore takes the aggressive and is able to force up its unit
return, it is aided if the positive factor originally receives a larger
share of the total product, so that it will not contract as rapidly
as it would otherwise do.
Where the positive factor received a smaller share than the
negative, then if the former raises its bargaining strength, the
decrease in remuneration per unit of the negative factor will
now be less than the increase in the return per unit for the
positive factor. This will cause the quantity of the negative
factor to increase less rapidly than under the assumption of
equal shares and hence will decrease the amount of the gain
per unit, which the positive factor will be able ultimately to
secure.
If the negative and larger factor, on the other hand, improves
its bargaining position, it causes a greater percentage fall in the
return per unit to the positive and smaller factor than the increase
per unit which it is able to secure for itself. This means that the
supply of the positive factor will be curtailed by a given advance
in the bargaining power of the negative factor more than would
be the case under the condition of equal shares. The negative
factor would, therefore, as a result of its possessing a greater
share of the total product, gain less than it would under equal
sharing.
When both factors are negative, then an increase in the bargaining
 power of the one with the greater initial share will cause
the unit return of the other factor to fall more rapidly than
            
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