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Strategic militancy and the probability of strikes in union-firm bargaining

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  • Appelbaum, Elie

Abstract

The paper provides a model that explains the probability of strikes by the union's use of militancy as a strategic tool in bargaining. Militants are useful because they provide a credible threat, hence enhancing the union's bargaining position. Using a multi-stage bargaining game, we show that, in general, militants will be used by the union as a strategic tool. The strategic benefit of militancy is reflected by the fact that the wage and employment level will be higher in a union that uses militants, compared to a union that does not. We use the model to show that the level of militancy and the probability of a strike decrease with the union's power. This suggests that policies that increase the strength of the union will have, at least, a partial positive effect on social welfare. We also show that the model can be viewed as providing an equilibrium of a repeated game, an interpretation that can explain the probability of strikes even in the absence of militants.

Suggested Citation

  • Appelbaum, Elie, 2008. "Strategic militancy and the probability of strikes in union-firm bargaining," Labour Economics, Elsevier, vol. 15(3), pages 315-333, June.
  • Handle: RePEc:eee:labeco:v:15:y:2008:i:3:p:315-333
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    Cited by:

    1. Appelbaum, Elie, 2008. "Extremism as a strategic tool in conflicts," Journal of Economic Behavior & Organization, Elsevier, vol. 68(2), pages 352-364, November.

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