Union games: technological unemployment

Gonzalo Fernandez-de-Cordoba and Emma Moreno-García

Economic Theory, 2006, vol. 27, issue 2, 359-373

Abstract: Given a production economy, we define union games by considering strategic behavior of the suppliers of factors. We refer to the Nash equilibria of this game as union equilibria. We analyze situations where the unemployment of factors is supported as a union equilibrium. The degree of unemployment depends on technological conditions. This allows us to model a source of unemployment which differs from the usual sources provided in the literature. We state a limit result that demonstrates that, as the market power of unions decreases, the corresponding sequence of union equilibria converges to the Walrasian equilibrium, that is, to full employment of factors. We also provide some examples that illustrate the main results. Copyright Springer-Verlag Berlin/Heidelberg 2006

Keywords: Union games; Unemployment; Walrasian equilibrium; Manipulability. (search for similar items in EconPapers)
Date: 2006
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Working Paper: Union Games: Technological Unemployment (2004)
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DOI: 10.1007/s00199-004-0595-0

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