Union Power and Product Market Competition: Evidence from the Airline Industry

Damien Neven, Lars-Hendrik Röller and Zhentang Zhang

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: In this paper we specify and estimate a structural model which links product market competition and union power. The model has a two-stage setting in which wages are determined through bargaining between management and unions in the first stage, with a price-setting market game to follow in the second stage. Using data for eight European airlines from 1976-1994, we provide evidence on price-cost margins and the measurement of market power in a model of rent sharing. In particular, we find that the welfare effects of rent sharing work mainly through reducing firms' profits, rather than consumers surplus. As a consequence the static impact of unions is more on equity rather than efficiency.

Keywords: efficiency; union power; market power; rent sharing; airline industry (search for similar items in EconPapers)
JEL-codes: L40 L93 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1998-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.hec.unil.ch/deep/textes/9810.pdf (application/pdf)

Related works:
Working Paper: Union Power and Product Market Competition: Evidence from the Airline Industry (1999)
Working Paper: Union Power and Product Market Competition: Evidence from the Airline Industry (1998)
Working Paper: Union Power and Product Market Competition: Evidence from the Airline Industry (1997)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:9810

Access Statistics for this paper

More papers in Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie Université de Lausanne, Faculté des HEC, Département d’économie, Internef, CH-1015 Lausanne. Contact information at EDIRC.
Bibliographic data for series maintained by Christina Seld ().