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Regulation with Wage Bargaining

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Author Info
Moen, Espen R
Morten Dalen, Dag
Von der Fehr, Nils-Henrik M

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Abstract

In many regulated industries labour unions are strong and there is clear empirical evidence of labour rent-sharing. In this Paper, we study optimal regulation in a model in which wages are determined endogenously by wage bargaining at the firm level. A seemingly robust conclusion, at least when worker bargaining power is considerable, is that incentives for cost efficiency should be stronger than in the standard case in which wages do not depend on the regulatory regime.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3748.

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Date of creation: Feb 2003
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Handle: RePEc:cpr:ceprdp:3748

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Related research
Keywords: regulation; wage bargaining;

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Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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References listed on IDEAS
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  1. Jean-Jacques Laffont & David Martimort, 1998. "Collusion and Delegation," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 280-305, Summer. [Downloadable!] (restricted)
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  2. Michael H. Riordan & David E.M. Sappington, 1989. "Second Sourcing," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 41-58, Spring. [Downloadable!] (restricted)
  3. Wallace Hendricks, 1975. "The Effect of Regulation on Collective Bargaining in Electric Utilities," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 451-465, Autumn. [Downloadable!] (restricted)
  4. Dalen, Dag Morten, 1995. "Efficiency-improving investment and the ratchet effect," European Economic Review, Elsevier, vol. 39(8), pages 1511-1522, October. [Downloadable!] (restricted)
  5. Tirole, Jean, 1994. "The Internal Organization of Government," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 1-29, January. [Downloadable!] (restricted)
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  6. Tirole, Jean, 1986. "Procurement and Renegotiation," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 235-59, April. [Downloadable!] (restricted)
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  7. David Card, 1996. "Deregulation and Labor Earnings in the Airline Industry," NBER Working Papers 5687, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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