Strategic union delegation and strike activity

Ana Mauleon and Vincent Vannetelbosch

Canadian Journal of Economics, 2005, vol. 38, issue 1, 149-173

Abstract: We develop a model of wage determination with private information, in which the union has the option to delegate the wage bargaining to either surplus-maximizing delegates or to wage-maximizing delegates (such as senior union members). We show that the wage outcome in case of surplus-maximizing delegates is not necessarily smaller than the wage outcome in case of wage-maximizing delegates, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the union is stronger than the firm and the demand is sufficiently elastic, then delegating to wage-maximizing delegates definitely increases the wage at equilibrium. The maximum delay in reaching an agreement is greater whenever the union chooses wage-maximizing delegates instead of surplus-maximizing delegates and remains finite even when the period length shrinks to zero.

JEL-codes: C70 C71 C72 C78 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (15)

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Journal Article: Strategic union delegation and strike activity (2005)
Working Paper: Strategic union delegation and strike activity (2005)
Working Paper: Strategic Union Delegation and Strike Activity (2002)
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