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Multi-Unionism at the Firm Level: The Impact of Asymmetric Nash Bargaining Solutions on Labor Unions’ Merger Incentives

Author

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  • Dario Cords

    (University of Hohenheim, Schloss Hohenheim 1C 70593, Stuttgart, Germany)

Abstract

This paper investigates the incentives of labor unions to merge in a right-to-manage model for several bargaining regimes. It is assumed that the worker groups produce different goods, and that the products are either substitutable in consumption (tariff competition), complementary (tariff plurality), or are independent of one another. The already existing merger results can be replicated in a right-to-manage model when joint bargaining is compared to simultaneous and sequential bargaining: labor unions have strict incentives to merge if the two products are substitutes in consumption, while they bargain independently if the products are complements in consumption. Further, there exists a first-mover advantage for unions under sequential bargaining for complementary products. Workers, on the other hand, benefit from a first-mover advantage in terms of their wage for the entire degree of product differentiation under sequential bargaining.

Suggested Citation

  • Dario Cords, 2021. "Multi-Unionism at the Firm Level: The Impact of Asymmetric Nash Bargaining Solutions on Labor Unions’ Merger Incentives," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-25, September.
    • Handle: RePEc:wsi:igtrxx:v:23:y:2021:i:03:n:s0219198921500031
    DOI: 10.1142/S0219198921500031
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    More about this item

    Keywords

    Labor unions; tariff competition; tariff plurality; merger incentives; asymmetric Nash bargaining solutions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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