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Unions and Market Integration in Contests

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  • Meland, Frode

Abstract

In this paper, we study the effects of introducing endogenous costs in a Tullock model of rent-seeking. We show that unions can be efficiency improving, and that the firms' levels of effort depend more critically upon the number of firms participating in the contest when unions are present. We then study the effects of market integration in a two-country setup. Integrating two initially separate markets is shown to decrease union set wages, but is nevertheless beneficial to firms of both countries only if there are sufficiently few contestants. However, unions and firms in one country might benefit from integration if their resident country is sufficiently large compared to the post-integration market. Copyright 2002 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 112 (2002)
Issue (Month): 3-4 (September)
Pages: 293-304

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Handle: RePEc:kap:pubcho:v:112:y:2002:i:3-4:p:293-304

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Web page: http://www.springerlink.com/link.asp?id=100332

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Cited by:
  1. Frode Meland & Odd Rune Straume, 2006. "Outsourcing in Contests," CESifo Working Paper Series 1658, CESifo Group Munich.
  2. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalisation and union opposition to technological change," Working Papers in Economics 01/05, University of Bergen, Department of Economics.
  3. Kjell Erik Lommerud & Frode Meland & Odd Rune Straume, 2008. "Mergers and capital flight in unionised oligopolies: Is there scope for a 'national champion' policy?," NIPE Working Papers 10/2008, NIPE - Universidade do Minho.

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