Collective Bargaining under Non-binding Contracts

Sabien Dobbelaere and Roland Iwan Luttens
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Roland Iwan Luttens: Ghent University, CORE - Cath. University Louvain

No 11-041/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We introduce collective bargaining in a static framework where the firm and its risk-neutral employees negotiate over wages in a non-binding contract setting. Our main result is the equivalence between the non-binding collective equilibrium wage-employment contract and the equilibrium contract under binding risk-neutral efficient bargaining. We also demonstrate that our non-cooperative equilibrium wages and profits coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.

Keywords: Collective bargaining; union; firm; bargaining power; non-binding contract (search for similar items in EconPapers)
JEL-codes: C71 J51 L20 (search for similar items in EconPapers)
Date: 2011-02-18
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Collective Bargaining under Non-Binding Contracts (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20110041

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