Comparison Wage in Trade Union Decision Making

Stavros Drakopoulos

MPRA Paper from University Library of Munich, Germany

Abstract: The starting point of this paper is the idea that trade unions and individual workers pay attention to wage settlements in similar sectors of the economy. The foundations of this concept can be found in other social sciences and also in the literature of psychological economics. However, it has not received much attention in connection to union decision making. This comparison or reference wage enters the decision making of the union (i.e. the union utility function). In this paper, we employ a union utility function which incorporates this concept. The analysis is conducted in a bargaining framework and the results show the effects on the optimal wage of important variables like comparison wage, unemployment benefit, union power and of the weight that the union places on the comparison wage

Keywords: Comparison Wage; Trade Union Decision Making; Union Bargaining (search for similar items in EconPapers)
JEL-codes: A12 D7 J5 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

Published in Acta Oeconomica 4.57(2007): pp. 377-388

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