The impact of trade unions on incentives to deter entry
AbstractIn this article I illustrate the impact of trade unions on strategic product market behavior. I discuss entry deterrence through capital durability in a model developed by Eaton and Lipsey. In the presence of unions, sunk capital scares away potential entrants but can also raise workers' bargaining power. Firms have thus to trade off these two effects in making their capital decisions. I analyze the impact of potential entry and unions on capital durability and welfare, and I discuss briefly the influence of unions on strategic product-market behavior in general.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/9571.
Date of creation: 1988
Date of revision:
Publication status: Published in: RAND Journal of Economics (1988) v.18,p.182-190
Other versions of this item:
- Mathias Dewatripont, 1988. "The Impact of Trade Unions on Incentives to Deter Entry," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 191-199, Summer.
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- Rupayan Pal & Bibhas Saha, 2010. "Entry Threats, and Inefficiency in Ã¢â‚¬ËœEfficient BargainingÃ¢â‚¬â„¢," Labor Economics Working Papers 23020, East Asian Bureau of Economic Research.
- Rupayan Pal & Bibhas Saha, 2010. "Entry Threats and Inefficiency in ‘Efficient Bargaining’," Working Papers id:2833, eSocialSciences.
- Sumon Kumar Bhaumik & Shubhashis Gangopadhyay & Shagun Krishnan, 2006.
"Reforms, Entry and Productivity: Some Evidence from the Indian Manufacturing Sector,"
William Davidson Institute Working Papers Series
822, William Davidson Institute at the University of Michigan.
- Bhaumik, Sumon K. & Gangopadhyay, Shubhashis & Krishnan, Shagun, 2006. "Reforms, Entry and Productivity: Some Evidence from the Indian Manufacturing Sector," IZA Discussion Papers 2086, Institute for the Study of Labor (IZA).
- Edgar Preugschat, 2009. "Unionization Patterns and Firm Reallocation," 2009 Meeting Papers 1114, Society for Economic Dynamics.
- Shingo Ishiguro & Laixun Zhao, 2004. "Raising Wages to Deter Entry under Unionization," Discussion Paper Series 155, Research Institute for Economics & Business Administration, Kobe University.
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