Dehez, Pierre (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) de la Croix, David (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; Belgian National Fund for Scientific Research (FNRS)) Toulemonde, Eric (University of Namur)
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The standard efficient contract involving a monopolistic firm and a union has always been derived under the assumption that the firm operates efficiently, i.e. it uses fully its labor force. However, nothing constrains the firm to do so and production with under-utilization of labor may actually occur. The implications of ignoring that possibility and the conditions under-utilization effectively occurs are studied.
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Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General