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The Rationally Shrinking Union

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  • Barry Nalebuff
  • Richard Sansing

Abstract

We analyze a voting model in which a democratic monopoly labor union rationally shrinks towards zero over time. In our model, preferences are not single‐peaked so that this shrinkage may occur in spite of objections by the median voter. We characterize the wage‐employment path as a function of the time horizon and the discount rate. We show that the employment path is independent both of the labor demand curve and of the workers’utility functions.

Suggested Citation

  • Barry Nalebuff & Richard Sansing, 1996. "The Rationally Shrinking Union," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 51-59, March.
    • Handle: RePEc:bla:ecopol:v:8:y:1996:i:1:p:51-59
    DOI: 10.1111/j.1468-0343.1996.tb00120.x
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    References listed on IDEAS

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    1. Paul Edward Johnson, 1990. "Unraveling in Democratically Governed Groups," Rationality and Society, , vol. 2(1), pages 4-34, January.
    2. Douglas H. Blair & David L. Crawford, 1984. "Labor Union Objectives and Collective Bargaining," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(3), pages 547-566.
    3. Burda, Michael C, 1990. "Membership, Seniority and Wage-Setting in Democratic Labour Unions," Economica, London School of Economics and Political Science, vol. 57(228), pages 455-466, November.
    4. Blanchflower, David G & Millward, Neil & Oswald, Andrew J, 1991. "Unionism and Employment Behaviour," Economic Journal, Royal Economic Society, vol. 101(407), pages 815-834, July.
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