Efficiency Wages, Unio-Firm Bargaining, and Strikes
AbstractWe consider efficiency wage effects in a union-firm bargaining model with private information. We show that efficiency wage effects do not necessarily increase the wage level at equilibrium. However, if it is commonly known that the union is stronger than the firm and the productivity enhancing effects of paying higher wages are sufficiently large, then efficiency wage effects still increase the wage of equilibrium. More surprisingly, we show that efficiency wage effects increase the strike activity.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2001010.
Date of creation: 01 May 2001
Date of revision:
Wages; Bargaining; Strikes; Efficiency wages;
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
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