Unionization structures in international oligopoly

Beatrice Pagel and Christian Wey

No 44, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We examine how competition in international markets affects a union's choice of wage regime which can be either uniform or discriminatory. Firms are heterogenous with regard to international competition. When unions choose their wage regimes sequentially, a discriminatory outcome becomes more likely when international competition increases. However, for intermediate levels a union may stick with a uniform wage regime even if the rival union adopts a discriminatory regime. When competition is sufficiently intense, both unions revert to the discriminatory regime. Paradoxically only in those latter instances all parties (consumers, workers and firms) may be better off (each in aggregate) if all unions adopt a uniform wage regime. We conclude that union incentives to coordinate their wage regimes should then also become largest.

Keywords: Unionization; International Oligopoly; Uniform Wages (search for similar items in EconPapers)
JEL-codes: D43 J51 L13 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-bec and nep-lab
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Journal Article: Unionization Structures in International Oligopoly (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:44

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