Wage-Employment Bargaining in a Unionized Oligopoly and International Market Integration

Nicole Gürtzgen
Authors registered in the RePEc Author Service: Nicole Guertzgen ()

No 17, Thuenen-Series of Applied Economic Theory from University of Rostock, Institute of Economics

Abstract: In a framework of a n-union/n-firm oligopoly, this paper analyzes the incentive for firms and unions to adopt efficient bargaining, i.e. negotiating over wages together with employment. The analysis is conducted for the case of autarchy and for an integrated product market. Firm profits, union utility and industry rents are compared under two different bargaining regimes - the right-to-manage model and the efficient bargaining model. For centralized negotiations, it is shown that under autarchy bargaining over wages and employment does not necessarily imply efficiency as total industry rents decrease. In the case of an integrated product market, however, adopting efficient bargaining raises rents if the market share of the domestic industry is relatively small.

Keywords: Trade Unions; Oligopoly; Efficient Bargaining; Integration (search for similar items in EconPapers)
JEL-codes: J50 L13 (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:roswps:17

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