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Why employees Prefer not to Bargain over Jobs

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  • Dowrick, Steve

Abstract

In general we expect efficient bargaining between a union and an employer to cover employment as well as wages. But employers may find that they win higher profits if they bargain over wages alone, since the threat of job losses can inhibit workers from pressing wage demands. This is shown to be the case in typical models which use the general (asymmetric) co-operative Nash-bargaining solution. So it is argued that the inclusion of jobs in bargaining is not just a question of efficiency, but also a question of power.

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Bibliographic Info

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 264.

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Length: 22 pages
Date of creation: 1985
Date of revision:
Handle: RePEc:wrk:warwec:264

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Cited by:
  1. Chi-Hsin Wu & Chia-Ying Liu, 2010. "Do Trade Unions Deteriorate International Competitiveness? Reconciliation of the Discrepancy Between Theory and Practice," Atlantic Economic Journal, International Atlantic Economic Society, vol. 38(2), pages 145-155, June.

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