Wage Determination and Capital Decisions in a Dynamic Monopoly Union Model (with an Application to Greek Manufacturing)

Saqib Jafarey, Yannis Kaskarelis and Natasha Miaouli
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Saqib Jafarey: University of Essex
Yannis Kaskarelis: University of Macedonia

No 1995007, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper uses a dynamic monopoly union model to analyze the joint determination of wages, employment and investment in the absence of binding contracts. The union maximizes a utilitarian utility function while the firm faces a neoclassical investment problem with adjustment costs. Concentrating on noncommitment equilibria. we solve for Markov strategies. When the model is tested for Greek manufacturing during the period 1954-1991, the data do not reject the theoretical predictions

Date: 1995-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1995007

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