Efficiency Wages, Unio-Firm Bargaining, and Strikes
We consider efficiency wage effects in a union-firm bargaining model with private information. We show that efficiency wage effects do not necessarily increase the wage level at equilibrium. However, if it is commonly known that the union is stronger than the firm and the productivity enhancing effects of paying higher wages are sufficiently large, then efficiency wage effects still increase the wage of equilibrium. More surprisingly, we show that efficiency wage effects increase the strike activity.
|Date of creation:||01 May 2001|
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- Rubinstein, Ariel, 1982.
"Perfect Equilibrium in a Bargaining Model,"
Econometric Society, vol. 50(1), pages 97-109, January.
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- Vannetelbosch, Vincent J., 1993. "Testing Between Alternative Wage-Employment Bargaining Models Using Belgian Aggreggate Data," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 27 Apr 1994.
- Summers, Lawrence H, 1988. "Relative Wages, Efficiency Wages, and Keynesian Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 383-388, May.
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- Joel Watson, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 573-594.
- Campbell, Carl M, III, 1993. "Do Firms Pay Efficiency Wages? Evidence with Data at the Firm Level," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 442-470, July.
- Garino, Gaia & Martin, Christopher, 2000. "Efficiency wages and union-firm bargaining," Economics Letters, Elsevier, vol. 69(2), pages 181-185, November.
- Christopher Martin, "undated". "Efficiency Wages and Union-Firm Bargaining," Economics and Finance Discussion Papers 97-10, Economics and Finance Section, School of Social Sciences, Brunel University.
- Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 87-130, Supplemen. Full references (including those not matched with items on IDEAS)
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