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Strategic union delegation and strike activity

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  • MAULEON, Ana
  • VANNETELBOSCH, Vincent

Abstract

. We develop a model of wage determination with private information, in which the union has the option to delegate the wage bargaining to either surplus‐maximizing delegates or to wage‐maximizing delegates (such as senior union members). We show that the wage outcome in case of surplus‐maximizing delegates is not necessarily smaller than the wage outcome in case of wage‐maximizing delegates, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the union is stronger than the firm and the demand is sufficiently elastic, then delegating to wage‐maximizing delegates definitely increases the wage at equilibrium. The maximum delay in reaching an agreement is greater whenever the union chooses wage‐maximizing delegates instead of surplus‐maximizing delegates and remains finite even when the period length shrinks to zero. JEL classification: C70, C71, C72, C78 Délégation syndicale stratégique et activité de grève. Nous étudions comment l’option pour les syndicats de déléguer la négociation salariale va influencer le salaire négocié et les incitations à faire la grève. Nous développons un modèle de négociation salariale avec information incomplète dans lequel le syndicat a l’option de déléguer la négociation à un délégué qui maximise le surplus ou à un délégué qui maximise le salaire. Nous montrons que le salaire négocié par un délégué qui maximise le surplus n’est pas nécessairement inférieur au salaire négocié par un délégué qui maximise le salaire. Cependant, si le syndicat est plus fort que la firme et la demande est élastique, alors le fait de déléguer la négociation à un délégué qui maximise le salaire va augmenter le salaire d’équilibre. Finalement, nous montrons que de plus longues grèves sont observées lorsque le syndicat délègue la négociation à un délégué qui maximise uniquement le salaire.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • MAULEON, Ana & VANNETELBOSCH, Vincent, 2005. "Strategic union delegation and strike activity," LIDAM Reprints CORE 1766, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1766
    DOI: 10.1111/j.0008-4085.2005.00273.x
    Note: In : Canadian Journal of Economics/Revue canadienne d'Economique, 38(1), 149-173, 2005.
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mauleon, Ana & Vannetelbosch, Vincent, 2010. "Market integration and strike activity," Journal of International Economics, Elsevier, vol. 81(1), pages 154-161, May.
    2. Ana Mauleon & Jose J. Sempere-Monerris & Vincent Vannetelbosch, 2008. "Networks of knowledge among unionized firms," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 971-997, August.
    3. Ana Mauleon & Huasheng Song & Vincent Vannetelbosch, 2010. "Networks of Free Trade Agreements among Heterogeneous Countries," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(3), pages 471-500, June.
    4. A. Mauleon & Vincent Vannetelbosch & Cecilia Vergari, 2014. "Unions' Relative Concerns And Strikes In Wage Bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 66(4), pages 374-383, October.
    5. Ana Mauleon & Vincent Vannetelbosch, 2006. "Strategic union delegation and incentives for merger," Applied Economics Letters, Taylor & Francis Journals, vol. 13(1), pages 1-5.
    6. Yi-Chun Chen & Xiao Luo, 2008. "Delay in a bargaining game with contracts," Theory and Decision, Springer, vol. 65(4), pages 339-353, December.
    7. Ana Mauleon & Vincent Vannetelbosch, 2013. "Relative Concerns and Delays in Bargaining with Private Information," Games, MDPI, vol. 4(3), pages 1-10, June.
    8. Kopel, Michael & Petrakis, Emmanuel & Ressi, Anna, 2019. "Endogenous scope of firm-union bargaining with vertical pay comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 39-52.
    9. Pei-Cheng Liao, 2014. "Strategic Delegation of Multiple Tasks," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 77-96, June.

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    More about this item

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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