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International Oligopoly and Asymmetric Labour Market Institutions

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Author Info
James A. Brander
Barbara J. Spencer

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Abstract

Asymmetries in labour relations can have important effects on imperfectively competitive rivalries between firms. Such asymmetries are particularly striking in cross-country comparisons and are therefore of greatest interest in international markets. Using a simple duopoly model, we focus on two asymmetries. First, one firm may face a noncooperative union and second, institutional factors may allow one firm to commit itself to particular labour input before its rival sets output, giving it a natural Stackelberg leadership role. We examine the trade policy incentives resulting from these labour asymmetries, focusing on profit shifting tariffs, quotas and subsidies.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2038.

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Date of creation: Oct 1986
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Publication status: published as Brander, J. and Spencer, B. "Unionized Oligopoly and International Trade Policy," Journal of International Economics, Vol. 24, No. 314, 1988, pp. 217-238.
Handle: RePEc:nbr:nberwo:2038

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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. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-71, May. [Downloadable!] (restricted)
  2. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February. [Downloadable!] (restricted)
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  3. Feenstra, Robert C., 1980. "Monopsony distortions in an open economy: A theoretical analysis," Journal of International Economics, Elsevier, vol. 10(2), pages 213-235, May. [Downloadable!] (restricted)
  4. Sampson, Anthony A, 1983. "Employment Policy in a Model with a Rational Trade Union," Economic Journal, Royal Economic Society, vol. 93(37), pages 297-311, June. [Downloadable!] (restricted)
  5. Brecher, Richard A., 1974. "Optimal commercial policy for a minimum-wage economy," Journal of International Economics, Elsevier, vol. 4(2), pages 139-149, May. [Downloadable!] (restricted)
  6. Dixit, Avinash, 1980. "The Role of Investment in Entry-Deterrence," Economic Journal, Royal Economic Society, vol. 90(357), pages 95-106, March. [Downloadable!] (restricted)
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  7. B. Curtis Eaton & Richard G. Lipsey, 1980. "Exit Barriers are Entry Barriers: The Durability of Capital as a Barrier to Entry," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 721-729, Autumn.
  8. Gene M. Grossman, 1984. "International Competition and the Unionized Sector," Canadian Journal of Economics, Canadian Economics Association, vol. 17(3), pages 541-56, August. [Downloadable!] (restricted)
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  9. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
  10. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring. [Downloadable!] (restricted)
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