International Oligopoly and Asymmetric Labour Market Institutions
AbstractAsymmetries 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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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2038.
Date of creation: Oct 1986
Date of revision:
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.
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