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Unions and Market Integrations in Contests

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  • Meland, F.

Abstract

In this paper, we study the effects of introducing endogenous costs in a Tullock model of rent-seeking. We show that unions can be efficiency improving, and that the firms' level of effort depends more critically upon the number of firms participating in the contests when unions are present. We then study the effects of market integration in a two-country setup. Integrating two initially separate markets is shown to decrease union set wages, but is never the less beneficial to firms of both countries only if there are sufficiently few contestants. However, unions and firms in one country might benefit from integration if their resident country is sufficiently large compared to the country with which it merges.

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Bibliographic Info

Paper provided by Department of Economics, University of Bergen in its series Norway; Department of Economics, University of Bergen with number 1600.

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Length: 17 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:bereco:1600

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Postal: Department of Economics, University of Bergen Fosswinckels Gate 6. N-5007 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/
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Keywords: MARKET ; UNION ; COSTS;

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Cited by:
  1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalisation and union opposition to technological change," Working Papers in Economics 01/05, University of Bergen, Department of Economics.
  2. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2008. "Mergers and capital flight in unionised oligopolies: Is there scope for a 'national champion' policy?," Working Papers in Economics 02/08, University of Bergen, Department of Economics.
  3. Frode Meland & Odd Straume, 2007. "Outsourcing in contests," Public Choice, Springer, vol. 131(3), pages 315-331, June.

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