Labor union bargaining and firm organizational structure

Aekapol Chongvilaivan, Jung Hur and Yohanes Riyanto

Labour Economics, 2013, vol. 24, issue C, 116-124

Abstract: Bargaining sequences, though vital to the real-world business strategies, are often treated as exogenously given. We examine bargaining sequences in the setting where a downstream firm makes a merger decision with an upstream partner and faces a negotiation with a union. When the downstream firm's power in the wage bargaining is weak, separation results and the input price bargaining proceeds prior to the wage bargaining. When the downstream firm's power in both negotiations is relatively equal, firms opt for separation and both negotiations keep on simultaneously. When the downstream firm's power in the wage negotiation is strong, the firms merge.

Keywords: Bargaining sequences; Generalized Nash bargaining; Vertical integration; Double marginalization (search for similar items in EconPapers)
JEL-codes: L22 L24 L44 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:24:y:2013:i:c:p:116-124

DOI: 10.1016/j.labeco.2013.08.001

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