Wage Bargaining and Management Opposition in the Presence of Productivity Gains and Organization Costs
AbstractEmpirical studies have emphasized three important factors in firm-labor relationships: (a) organization costs of workers, (b) management opposition against workers' organizing drives, (c) the possibility of productivity enhancing effects due to "voice/response" reasons. In this paper the interplay of all three issues is simultaneously analyzed. The possibility of forgone productivity gains puts an upper bound on management opposition against organizing drives of the workers, even if management opposition is cost-less. Strategic gift exchange - less opposition for higher productivity - plays a crucial role. Decreasing productivity gains and increasing the firm's bargaining power lowers management opposition. The equilibrium wage is above the workers' reservation wage.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 49.
Length: 36 pages
Date of creation: Oct 1997
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Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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