IDEAS home Printed from https://ideas.repec.org/a/ucp/jnlbus/v71y1998i3p349-69.html
   My bibliography  Save this article

Self-Enforcing Union Contracts: Efficient Investment and Employment

Author

Listed:
  • Addison, John T
  • Chilton, John B

Abstract

Carliss Baldwin (1983) asks whether a firm can credibly deter union opportunism that would lead to underinvestment. The authors show that the punishments Baldwin considers credible exclude tougher threats that only have the appearance of being self-destructive. If the firm's discount factor is sufficiently close to one, union opportunism can indeed be deterred. Moreover, the authors show that given the firm's discount factor, a shorter lifetime of capital does not necessarily promote efficiency. Although, as Baldwin emphasizes, it does enhance the firm's ability to punish union opportunism, it also creates adverse incentives for the firm to engage in opportunistic employment cuts. Copyright 1998 by University of Chicago Press.

Suggested Citation

  • Addison, John T & Chilton, John B, 1998. "Self-Enforcing Union Contracts: Efficient Investment and Employment," The Journal of Business, University of Chicago Press, vol. 71(3), pages 349-369, July.
  • Handle: RePEc:ucp:jnlbus:v:71:y:1998:i:3:p:349-69
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/209748
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:indres:v:56:y:2017:i:1:p:73-121 is not listed on IDEAS
    2. Damiaan Persyn, 2009. "Union wage demands with footloose firms," Working Papers VIVES Research Centre for Regional Economics 3, KU Leuven, Faculty of Economics and Business, VIVES Research Centre for Regional Economics.
    3. Addison, John T. & Heywood, John S. & Wei, Xiangdong, 2001. "Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS," IZA Discussion Papers 352, Institute for the Study of Labor (IZA).
    4. Gavin Cameron & Chris Wallace, 2002. "Macroeconomic Performance in the Bretton Woods Era and After," Oxford Review of Economic Policy, Oxford University Press, vol. 18(4), pages 479-494.
    5. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2007. "Do Works Councils Inhibit Investment?," ILR Review, Cornell University, ILR School, vol. 60(2), pages 187-203, January.
    6. Barry T. Hirsch, 2008. "Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 153-176, Winter.
    7. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute for the Study of Labor (IZA).
    8. Addison, John T. & Bellmann, Lutz & K├Âlling, Arnd, 2002. "Unions, Works Councils and Plant Closings in Germany," IZA Discussion Papers 474, Institute for the Study of Labor (IZA).
    9. John T. Addison & Clive R. Belfield, 2004. "Union Voice," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 563-596, October.
    10. Tapan Biswas & Jolian McHardy, 2012. "On the incentives to increase input efficiency under monopoly trade unions," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 4(1), pages 39-51, June.
    11. Menezes-Filho, Naercio & Van Reenen, John, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.
    12. Persyn, Damiaan, 2013. "Union wage demands with footloose firms and agglomeration forces," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 142-150.

    More about this item

    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:ucp:jnlbus:v:71:y:1998:i:3:p:349-69. 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: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JB/ .

    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.