The Economics of First-Contract Mediation

Sabien Dobbelaere and Roland Iwan Luttens ()
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Roland Iwan Luttens: University of Amsterdam

No 7541, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides an economic foundation for non-binding mediation to stimulate first collective bargaining agreements, as implemented in British Columbia since 1993. We show that the outcome of first-contract mediation is Pareto efficient and proves immune to the insider-outsider problem of underhiring. We also demonstrate that equilibrium wages and profits under mediation coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.

Keywords: BC first-contract model; mediation; collective bargaining; union; non-binding contract (search for similar items in EconPapers)
JEL-codes: C71 J51 K12 L20 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-07
New Economics Papers: this item is included in nep-cdm, nep-hpe and nep-spo
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Working Paper: The Economics of First-Contract Mediation (2013)
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