Unions and Market Integrations in Contests

Frode Meland

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: In this paper, we study the effects of introducing endogenous costs in a Tullock model of rent-seeking. We show that unions can be efficiency improving, and that the firms' level of effort depends more critically upon the number of firms participating in the contests when unions are present. We then study the effects of market integration in a two-country setup. Integrating two initially separate markets is shown to decrease union set wages, but is never the less beneficial to firms of both countries only if there are sufficiently few contestants. However, unions and firms in one country might benefit from integration if their resident country is sufficiently large compared to the country with which it merges.

Keywords: MARKET; UNION; COSTS (search for similar items in EconPapers)
JEL-codes: F12 F15 J51 L13 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2000
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Journal Article: Unions and Market Integration in Contests (2002)
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