A comment on fair-shares and trade union behaviour

Trond-Arne Borgersen

International Journal of Economics and Business Research, 2009, vol. 1, issue 2, 228-233

Abstract: This article comments on trade union behaviour and the fair-share rule of McDonald and Solow (1981) 'Wage bargaining and employment', American Economic Review, Vol. 71, pp.896–908. A small intertemporal model of union behaviour which shows how the fair-share rule only is valid in long run equilibrium is presented. An intertemporal fair-share rule which coincides with the McDonald and Solow rule in long run equilibrium is instead derived. The intertemporal rule links wages to the permanent value of labour's contribution to output, and ensures capital a return equal to its outside option. The model shows how entrenched union behaviour coincides with the reasoning of implicit contract theory, and provides a possible solution to the enforcement problem of implicit contracts.

Keywords: trade union behaviour; fair-share rules; intertemporal behaviour; trade unions; implicit contract theory. (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=24021 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:1:y:2009:i:2:p:228-233

Access Statistics for this article

More articles in International Journal of Economics and Business Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().