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Strategic union delegation and incentives for merger

  • Ana Mauleon
  • Vincent Vannetelbosch

A unionized duopoly model to analyse how unions affect the incentives for merger is considered. It is found that both firms will merge if and only if unions are weak. However, once surplus-maximizing unions have the option to delegate the wage bargaining to wage-maximizing delegates (such as senior union members), both firms may have incentives to merge even if the union bargaining power is strong. Moreover, the option of strategic delegation may harm both the unions and the firms.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 1 ()
Pages: 1-5

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:1:p:1-5
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  1. Ana MAULEON & Vincent J. VANNETELBOSCH, 2002. "Strategic Union Delegation and Strike Activity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Conlin, Michael & Furusawa, Taiji, 2000. "Strategic Delegation and Delay in Negotiations over the Bargaining Agenda," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 55-73, January.
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