Union Duopoly with Heterogeneous Labour: The Effect of Wage Ceilings

Ana Paula Martins

Journal of Economics and Econometrics, 2015, vol. 58, issue 2, 27-51

Abstract: This research analyzes the labor market outcome when there are two unions in the industry, representing heterogeneous workers - substitutes or complements in production - and using wage strategies, in the presence of wage regulation. Three strategic environments are considered: symmetric Bertrand-Nash duopoly, Stackelberg duopoly and efficient cooperation between the two unions. We discuss the case of the imposition of a wage ceiling, oriented towards increase employment. In fact, this is the general result obtained. We also inspect if it may be optimal for a Stackelberg leading union to push the other to the bound.

Keywords: Unions; wage determination models; union bargaining; corporatism; imperfect competition and union behaviour; union oligopoly; wage ceilings; wage controls. (search for similar items in EconPapers)
JEL-codes: C79 D49 E24 J38 J51 (search for similar items in EconPapers)
Date: 2015
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