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Product Market Integration, Wage Bargaining and Strike Activity

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Author Info
Ana MAULEON (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
Vincent J. VANNETELBOSCH (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

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Abstract

We develop a spatial two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigage the effects of separated product markets opening up for competition as well as of further market integration on the negotiated wage and the strike activity. We show that, when product markets are separated, the wage level and the strike activity are decreasing with the transportation cost and the home market size. However, when markets are integrated, wages and strikes are now increasing with the transportation cost. Finally, we find that the opening of markets for competition has an ambiguous impact on both the negotiated wage and the strike activity.

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Publisher Info
Paper 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 2001022.

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Length: 17
Date of creation: 01 Sep 2001
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Handle: RePEc:ctl:louvir:2001022

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Related research
Keywords: economic integration; horizontal differentiation; product market competition; wage bargaining; strike activity;

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Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
F15 - International Economics - - Trade - - - Economic Integration
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
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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  1. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-50, September. [Downloadable!] (restricted)
  2. Henrick Horn & Asher Wolinsky, 1988. "Bilateral Monopolies and Incentives for Merger," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 408-419, Autumn. [Downloadable!] (restricted)
    Other versions:
  3. Huizinga, Harry, 1993. " International Market Integration and Union Wage Bargaining," Scandinavian Journal of Economics, Blackwell Publishing, vol. 95(2), pages 249-55.
  4. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January. [Downloadable!] (restricted)
  5. Torben M. Andersen & Niels Haldrup & Jan Rose Sørensen, 2000. "Labour market implications of EU product market integration," Economic Policy, CEPR, CES, MSH, vol. 15(30), pages 105-134, 04. [Downloadable!] (restricted)
  6. Vannetelbosch, Vincent J., 1997. "Wage bargaining with incomplete information in an unionized Cournot oligopoly," European Journal of Political Economy, Elsevier, vol. 13(2), pages 353-374, May. [Downloadable!] (restricted)
  7. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S87-130, Supplemen. [Downloadable!] (restricted)
  8. Dowrick, Steve, 1989. "Union-Oligopoly Bargaining," Economic Journal, Royal Economic Society, vol. 99(398), pages 1123-42, December. [Downloadable!] (restricted)
  9. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July. [Downloadable!] (restricted)
  10. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July. [Downloadable!] (restricted)
  11. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer. [Downloadable!] (restricted)
  12. Francis K. Cheung & Carl Davidson, 1991. "Bargaining Structure and Strike Activity," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 345-71, May. [Downloadable!] (restricted)
  13. Vannetelbosch, Vincent J., 1996. "Testing between alternative wage-employment bargaining models using Belgian aggregate data," Labour Economics, Elsevier, vol. 3(1), pages 43-64, August. [Downloadable!] (restricted)
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  14. Driffill, John & van der Ploeg, Frederick, 1995. " Trade Liberalization with Imperfect Competition in Goods and Labour Markets," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(2), pages 223-43, June.
  15. Watson, Joel, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Blackwell Publishing, vol. 65(3), pages 573-94, July. [Downloadable!] (restricted)
    Other versions:
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