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Strategic Union Delegation 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 model of wage determination with private information, in which te union has the option to delegate the wage bargaining to either surplus-maximizing delegates or to wage-maximizing delegates (such as senior union members). We show that the strike activity is greater whenever the union chooses wage-maximizing delegates instead of surplus-maximizing delegates. We also provide the necessary and sufficient condition such that it is always optimal for the union to choose wage-maximizing delegates and we we find that the efficiency loss due to strategic delegation may be quite important.

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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 2002011.

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Length: 13
Date of creation: 01 Mar 2002
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Handle: RePEc:ctl:louvir:2002011

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Related research
Keywords: Union delegation; Wage bargaining; Private information; Strike activity;

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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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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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)
  2. Tracy, Joseph S, 1986. "An Investigation into the Determinants of U.S. Strike Activity," American Economic Review, American Economic Association, vol. 76(3), pages 423-36, June.
  3. 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)
  4. Conlin, Michael & Furusawa, Taiji, 2000. "Strategic Delegation and Delay in Negotiations over the Bargaining Agenda," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 55-73, January. [Downloadable!] (restricted)
  5. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March. [Downloadable!] (restricted)
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  6. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-40, December. [Downloadable!] (restricted)
    Other versions:
  7. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January. [Downloadable!] (restricted)
  8. Stephen R. G. Jones, 1989. "The Role of Negotiators in Union-Firm Bargaining," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 630-42, August. [Downloadable!] (restricted)
  9. 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)
  10. 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)
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  11. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-81, December. [Downloadable!] (restricted)
  12. Steven D. Sklivas, 1987. "The Strategic Choice of Managerial Incentives," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 452-458, Autumn. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. MAULEON, Ana & VANNETELBOSCH, Vincent, 2005. "Market integration and strike activity," CORE Discussion Papers 2005036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
    Other versions:
  2. Yi-Chun Chen & Xiao Luo, 2008. "Delay in a bargaining game with contracts," Theory and Decision, Springer, vol. 65(4), pages 339-353, December. [Downloadable!] (restricted)
  3. Ana, MAULEON & Huasheng, SONG & Vincent, VANNETELBOSCH, 2006. "Networks for Free Trade Agreements among Heterogeneous Countries," Discussion Papers (ECON - Département des Sciences Economiques) 2006029, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  4. Ana Mauleon & Vincent J. Vannetelbosch, 2006. "Strategic union delegation and incentives for merger," Applied Economics Letters, Taylor and Francis Journals, vol. 13(1), pages 1-5, January. [Downloadable!] (restricted)
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