Strike Activity and Bertrand vs Cournot Competition
AbstractWe develop a model of wage determination with private information in a unionized imperfectly competitive industry. Under two different bargaining structures (firm-level vs industry-level), we investigate the effects of the degree of product differentiation and the type of market competition (Bertrand vs Cournot competition) on the negotiated wage and the strike activity. If the wage bargaining takes place at the industry-level, then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition. However, if the wage bargaining takes place at the firm-level, then wages and strikes are increasing with the degree of product differentiation, and the strike activity is smaller under Bertrand than under Cournot competition.
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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 2001011.
Date of creation: 01 May 2001
Date of revision:
Bertrand competition; Cournot competition; product differentiation; wage bargaining; strike activity;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-02-10 (All new papers)
- NEP-LAB-2002-02-10 (Labour Economics)
- NEP-MIC-2002-02-10 (Microeconomics)
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