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Wage bargaining and monopsony

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  • Falch, Torberg
  • Strom, Bjarne

Abstract

This paper identifies three possible outcomes of higher relative firm bargaining power in a unionized firm facing an upward sloping labor supply curve. The conventional regime with reduced wage and higher employment corresponds to firm bargaining power below a certain critical value. A supply constrained regime where increased firm bargaining power reduces both wages and employment occurs when the bargaining power is above another critical level. A novel result is that we identify a third regime, with firm bargaining power between these critical levels, where changes in relative bargaining power does not affect wages and employment.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 94 (2007)
Issue (Month): 2 (February)
Pages: 202-207

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Handle: RePEc:eee:ecolet:v:94:y:2007:i:2:p:202-207

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Cited by:
  1. Falch, Torberg & Strom, Bjarne, 2007. "Wage bargaining and monopsony," Economics Letters, Elsevier, vol. 94(2), pages 202-207, February.

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