When unionisation is profitable for firms in network industries
Luciano Fanti () and
Domenico Buccella ()
No 2017-9, Economics Discussion Papers from Kiel Institute for the World Economy (IfW)
In an industry characterised by the presence of network effects, this paper investigates a duopolistic game in which firms may choose whether to bargain over wages and employment with unions or to face a competitive labour market (i.e. without unions). If unions are sufficiently risk-averse, it is shown that the presence of strong network effects makes unionisation the Pareto-efficient sub-game perfect Nash equilibrium outcome for firms. The issue of entry is also investigated.
Keywords: unionised oligopoly; competitive labour market; efficient bargaining; market entry and entry deterrence (search for similar items in EconPapers)
JEL-codes: J51 L13 L20 (search for similar items in EconPapers)
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Journal Article: When unionisation is profitable for firms in network industries (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:20179
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