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Do labour union recognition and bargaining deter entry in a network industry? A sequential game model

Domenico Buccella () and Luciano Fanti

Utilities Policy, 2020, vol. 64, issue C

Abstract: This study considers whether an incumbent firm can find it profitable to recognise a union and bargain over wages and employment, rather than to face a competitive labour market without unions. Using a sequential game model, this analysis shows that an incumbent firm may recognise a union to deter entry when network effects are sufficiently low.

Keywords: Unionised oligopoly; Competitive labour market; Efficient bargaining; Market entry and entry deterrence (search for similar items in EconPapers)
JEL-codes: J51 L13 L20 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.jup.2020.101025

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