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Comparison Wage in Trade Union Decision Making

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  • Drakopoulos, Stavros A.

Abstract

The starting point of this paper is the idea that trade unions and individual workers pay attention to wage settlements in similar sectors of the economy. The foundations of this concept can be found in other social sciences and also in the literature of psychological economics. However, it has not received much attention in connection to union decision making. This comparison or reference wage enters the decision making of the union (i.e. the union utility function). In this paper, we employ a union utility function which incorporates this concept. The analysis is conducted in a bargaining framework and the results show the effects on the optimal wage of important variables like comparison wage, unemployment benefit, union power and of the weight that the union places on the comparison wage

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46287.

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Date of creation: 2007
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Publication status: Published in Acta Oeconomica 4.57(2007): pp. 377-388
Handle: RePEc:pra:mprapa:46287

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Keywords: Comparison Wage; Trade Union Decision Making; Union Bargaining;

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References

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Cited by:
  1. Panos, Georgios & Theodossiou, Ioannis, 2010. "Unionism and Peer-Referencing," Stirling Economics Discussion Papers 2010-03, University of Stirling, Division of Economics.

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