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Employers’ Associations, Industry-wide Unions, and Competition

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  • Paul Heidhues

Abstract

This paper investigates the effects of industry-wide unions and employers’ associations in a duopolistic industry. Using an efficient bargaining model, we show that it is profitable for workers to form an industry union if firms produce goods that are substitutes. In our model industry-wide unionization raises serious antitrust issues since it leads to a monopolistic product market outcome - regardless of whether bargaining is centralized or not. Firms respond to an industry union by forming an employers’ association to increase their bargaining power. If firms’ productivity differences are relatively small or their products relatively heterogeneous, employers’ associations have distributional but not efficiency consequences. If, however, productivity differences between firms are relatively large and their products are relatively homogeneous, employers’ associations may further reduce welfare. ZUSAMMENFASSUNG - (Arbeitgeberverbände, Industriegewerkschaften und Wettbewerb) Dieser Beitrag untersucht die ökonomischen Auswirkungen von Industriegewerkschaften und Arbeitgeberverbänden in einer duopolistischen Industrie. Anhand eines effizienten Verhand-lungsmodells zeigen wir, dass es sich für Arbeitnehmer lohnt, eine Industriegewerkschaft zu gründen, wenn die Unternehmen substituierbare Güter herstellen. Die Bildung einer Industrie-gewerkschaft ist aus wettbewerbspolitischer Sicht jedoch höchst bedenklich, da sie zu einer Monopolisierung des Produktmarktes führt - unabhängig davon, ob Lohnverhandlungen zentral oder dezentral durchgeführt werden. In unserem Modell ist es für die Unternehmen optimal, auf eine Industriegewerkschaft mit der Gründung eines Arbeitgeberverbandes zu reagieren, weil das die Verhandlungsmacht gegenüber der Gewerkschaft erhöht. Wenn die Produktivitätsunterschiede zwischen den Firmen relativ klein sind oder die Firmen sehr heterogene Produkte produzieren, beeinflussen Arbeitgeberverbände zwar die Verteilung, aber nicht die Höhe der Industrierente. Arbeitgeberverbände können die gesamtwirtschaftliche Wohlfahrt senken, wenn die Produktivitätsunterschiede zwischen den Unternehmen groß und die Produkte relativ homogen sind.

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Bibliographic Info

Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 00-11.

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Length: 50 pages
Date of creation: Aug 2000
Date of revision:
Handle: RePEc:wzb:wzebiv:fsiv00-11

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References

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Cited by:
  1. Suchan Chae & Paul Heidhues, 2003. "Buyers’ Alliances for Bargaining Power," CIG Working Papers SP II 2003-24, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  2. Xavier Martinez-Giralt & Pedro Pita Barros, 2000. "Selecting Negotiation Processes with Health Care," UFAE and IAE Working Papers 467.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

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