Theory of Semi-Collusion in the Labor Market
AbstractWe study the effects of cooperative wage setting in industries that use two different types of labor. In particular, we consider a two-stage game where firms hire non-specialized workers in a perfectly competitive labor market and specialized workers that are more productive and expensive, but whose wages can be cooperatively determined by firms. It is shown that semi-collusion leads to lower wages and employment of specialized labor, lower production levels and higher prices, due to the elimination of the business stealing effect, labor force stealing effect and as a result of a dynamic effect that is specific to semi-collusive games.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 522.
Length: 45 pages
Date of creation: Jan 2014
Date of revision:
Semi-collusion; labor market; oligopsony; business stealing effect; labor force stealing effect; price war effect; shooting the moon strategy.;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
This paper has been announced in the following NEP Reports:
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.:
- Arijit Mukherjee & Luís Vasconcelos, 2012. "Star Wars: Exclusive Talent and Collusive Outcomes in Labor Markets," Journal of Law, Economics and Organization, Oxford University Press, vol. 28(4), pages 754-782, October.
- Reinhard Selten, 1973. "A Simple Model of Imperfect Competition, where 4 are Few and 6 are Many," Working Papers 008, Bielefeld University, Center for Mathematical Economics.
- Natalya Y. Shelkova, 2008.
"Low-wage labor markets amd the power of suggestion,"
1112, Princeton University, Department of Economics, Industrial Relations Section..
- Natalya Y. Shelkova, 2008. "Low-Wage Labor Markets and the Power of Suggestion," Working papers 2008-33, University of Connecticut, Department of Economics, revised Dec 2008.
- Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, .
"Cooperative and noncooperative R&D in duopoly with spillovers,"
CORE Discussion Papers RP
-823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-37, December.
- Eckard, E Woodrow, Jr, 1991. "Competition and the Cigarette TV Advertising Ban," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 119-33, January.
- Brod, Andrew & Shivakumar, Ram, 1999. "Advantageous Semi-collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 47(2), pages 221-30, June.
- Steen, Frode & S�rgard, Lars, 2010. "Semicollusion," Foundations and Trends(R) in Microeconomics, now publishers, vol. 5(3), pages 153-228, April.
- Witness Simbanegavi, 2005. "Informative Advertising: Competition or Cooperation?," Working Papers 33, Economic Research Southern Africa.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.