Unionized Labor Market and Regulation of Monopoly

Mohamed Jellal ()

MPRA Paper from University Library of Munich, Germany

Abstract: In developing countries, empirical evidence suggests that labor unions entail a positive wage gap for unionized workers, in particular in monopolistic and publicly controlled firms. In this paper, we analyze how the presence of a labor union affects the regulation of a monopoly under asymmetric information. Since part of the informational rent left to the monopolistic firm benefits to the syndicate, we prove that the regulator is induced to lower the rent when the union has a large bargaining power. The net consumers' surplus can either increase or decrease with the firm's bargaining power depending on the firm's efficiency type. JEL

Keywords: asymmetric Information; Labor Union; Monopolistic Firms; Regulation Incentives (search for similar items in EconPapers)
JEL-codes: D42 D82 J51 L43 (search for similar items in EconPapers)
Date: 2009-09-12
New Economics Papers: this item is included in nep-cta, nep-lab and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17279

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