Unionized monopoly regulation: strategic trade vs. domestic competition policies

Domenico Buccella

Economics Bulletin, 2012, vol. 32, issue 1, 932-940

Abstract: This note analyzes the differences between strategic trade and domestic competition policies to regulate a unionized monopoly. In the presence of an industry-wide union, the entry of a domestic competitor does not reduce labor market distortions, while strategic trade policy reduces both labor and product markets distortions. The fixed cost for the domestic entrant and the foreign union sensitivity to employment determine which policy should be implemented to maximize national welfare.

Keywords: strategic trade policy; competition policy; unionized monopoly. (search for similar items in EconPapers)
JEL-codes: F1 J5 (search for similar items in EconPapers)
Date: 2012-03-21
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