IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v233y2023ics0165176523004056.html
   My bibliography  Save this article

Individual versus collective bargaining under relative income concerns

Author

Listed:
  • Demougin, Dominique
  • Upton, Harvey

Abstract

We compare individual and collective bargaining when workers have relative income concerns and employment relationships are characterized by moral hazard. We show that collective bargaining internalizes externality effects that arise from other-regarding preferences. This improves firms’ abilities to create effort incentives and can therefore reduce inefficiencies associated with asymmetric information. We show that if relative income concerns are not too strong, both firms and workers strictly prefer collective bargaining.

Suggested Citation

  • Demougin, Dominique & Upton, Harvey, 2023. "Individual versus collective bargaining under relative income concerns," Economics Letters, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004056
    DOI: 10.1016/j.econlet.2023.111380
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176523004056
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2023.111380?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Relative income concerns; Moral hazard; Bargaining;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004056. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.