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Union Bargaining Strength as a Public Good: Experimental Evidence

Claudia Keser (), Jean-Louis Rullière () and Marie Claire Villeval ()
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Claudia Keser: Institut für Statistik und Mathematische Wirtschaftstheorie, Postal: Universität Karlsruhe, Rechenzentrum, Zirkel 2, 76128 Karlsruhe

No 99-20, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: When collective agreements apply to all employees, whether unionized or not, what is the rationale behind joining a union? The paper presents an experiment on a two-stage game. In the first stage, the decision to join a union is modeled as a voluntary contribution to a public good. In the second stage, the unionized employees bargain with the employer over wages. The experimental evidence reveals that: i) the union density is higher than predicted by theory but declining over time, ii) the size of the union increases the employees' bargaining power but not as much as predicted.

Date: 1999-03-17
Note: Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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