IDEAS home Printed from
   My bibliography  Save this article

Optimal Degree of Regulation in a Unionised Economy


  • Lorenzo Corsini


The aim of this paper is to analyse to which extent a deregulation policy in the labour and product markets leads to an improvement in the utility of all the parties (firms and unions). To do that, we build a model where firms hire workers in a unionised labour market and sell their products in a market ruled by monopolistic competition. The parties bargain over real wages according to a Right to Manage rule. The solution of the bargaining problem allows us to determine the real wages and through them we can obtain the equilibrium level of employment and the consequent utilities for the union and the firms. We use this model to examine the effects of (de)regulation policies and we search for the existence of policies that increase the utilities of both parties. We show that such Pareto improving policies exist and their implementation leads to an optimal degree of regulation.

Suggested Citation

  • Lorenzo Corsini, 2009. "Optimal Degree of Regulation in a Unionised Economy," Economia politica, Società editrice il Mulino, issue 1, pages 105-120.
  • Handle: RePEc:mul:jb33yl:doi:10.1428/29094:y:2009:i:1:p:105-120

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    File URL:
    Download Restriction: no

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

    More about this item


    Access and download statistics


    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:mul:jb33yl:doi:10.1428/29094:y:2009:i:1:p:105-120. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.