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Unionized monopoly regulation: strategic trade vs. domestic competition policies

Author

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  • Domenico Buccella

    () (Dipartimento di Economia Politica e Statistica, Università di Siena)

Abstract

This note analyzes the differences between strategic trade and domestic competition policies to regulate a unionized monopoly. In the presence of an industry-wide union, the entry of a domestic competitor does not reduce labor market distortions, while strategic trade policy reduces both labor and product markets distortions. The fixed cost for the domestic entrant and the foreign union sensitivity to employment determine which policy should be implemented to maximize national welfare.

Suggested Citation

  • Domenico Buccella, 2012. "Unionized monopoly regulation: strategic trade vs. domestic competition policies," Economics Bulletin, AccessEcon, vol. 32(1), pages 932-940.
  • Handle: RePEc:ebl:ecbull:eb-12-00208
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    Keywords

    strategic trade policy; competition policy; unionized monopoly.;

    JEL classification:

    • F1 - International Economics - - Trade
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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