Strike Behaviour When Market Share Matters

Simon Clark

Oxford Economic Papers, 1996, vol. 48, issue 4, 618-39

Abstract: This paper analyzes the dynamics of strike incidence when a firm's market share affects its future profitability. Inventory accumulation is assumed to be impossible, so during a strike sales are zero, thereby reducing future demand. Anticipation of the future effects of a strike leads to lower wage settlements and a lower probability of disagreement. Thus strike incidence is reduced. Furthermore, a recent strike may make a further one less or more likely, depending on the union's reservation wage and the precise way that market share evolves. This may help to explain some conflicting empirical results. Copyright 1996 by Royal Economic Society.

Date: 1996
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