Welfare-enhancing Trade Unions in an Oligopoly with Excessive Entry

Marco De Pinto and Laszlo Goerke

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: If input markets are competitive and output per firm declines with the number of firms (business stealing effect), there will be excessive entry into a Cournot oligopoly for a homogeneous commodity. However, input markets are often imperfectly competitive and the price of labor is determined by collective bargaining. The resulting rise in wages reduces output and profits and can deter entry. We analyze under which conditions greater bargaining power by the trade union reduces entry and raises welfare. Furthermore, we show that collective bargaining loosens the linkage between business stealing and excessive entry.

JEL-codes: D43 J51 L13 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Welfare‐enhancing Trade Unions in an Oligopoly with Excessive Entry (2020)
Working Paper: Welfare-enhancing trade unions in an oligopoly with excessive entry (2019)
Working Paper: Welfare-Enhancing Trade Unions in an Oligopoly with Excessive Entry (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145498

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