Chamberlinian Imperfect Competition Among Rational Firm-Workers Coalitions: Is Underbidding by Unemployed Workers Less Effective?
AbstractMacroeconomic models with imperfect competition usually result in theoretical own-price elasticities of labour demand higher than one in absolute value. Yet often empirical studies find much lower estimated elasticities. A Chamberlinian two sectors model of imperfect competition with decentralised wage bargaining on labour productivity is here developed and the results show that lower theoretical elasticities are faced by rational firm-workers coalitions. Thus a lower effectiveness of underbidding by unemployed workers is theoretically suggested. Moreover an higher long term dependence of employment on nominal shocks is an other feature suggested by the model’s results.
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Bibliographic InfoPaper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2001-EP05.
Length: 23 pages
Date of creation: 2001
Date of revision:
elasticity of labour demand; Long term; Imperfect competition; Chamberlin; Wage bargaining; Labour productivity; Firm-workers coalitions; Rationality;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-30 (All new papers)
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