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Endogenous Unions Formation

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  • Chica Páez, Yolanda
  • Espinosa Alejos, María Paz

Abstract

This paper analyzes the process of endogenous union formation in the context of a sequential bargaining model between a firm and several unions and tries to explain why workers may be represented by several unions of different sizes. We show that the equilibrium number of unions and their relative size depend on workers' attitudes toward the risk of unemployment and union configuration is independent of labor productivity.

Suggested Citation

  • Chica Páez, Yolanda & Espinosa Alejos, María Paz, 2009. "Endogenous Unions Formation," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    • Handle: RePEc:ehu:dfaeii:6569
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    References listed on IDEAS

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    1. Dobson, Paul W., 1994. "Multifirm unions and the incentive to adopt pattern bargaining in oligopoly," European Economic Review, Elsevier, vol. 38(1), pages 87-100, January.
    2. Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-497, June.
    3. Banerji, A., 2002. "Sequencing strategically: wage negotiations under oligopoly," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1037-1058, September.
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    5. Maria Paz Espinosa & Changyong Rhee, 1989. "Efficient Wage Bargaining as a Repeated Game," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(3), pages 565-588.
    6. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 185-199.
    7. repec:bla:scotjp:v:44:y:1997:i:2:p:134-52 is not listed on IDEAS
    8. Sara De la Rica & Marìa Paz Espinosa, 1997. "Testing Employment Determination in Unionised Economies as a Repeated Game," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(2), pages 134-152, May.
    9. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    10. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-139, March.
    11. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
    12. Belleflamme, Paul, 2000. "Stable Coalition Structures with Open Membership and Asymmetric Firms," Games and Economic Behavior, Elsevier, vol. 30(1), pages 1-21, January.
    13. repec:bla:scandj:v:97:y:1995:i:1:p:161-67 is not listed on IDEAS
    14. Paz Espinosa, Maria & Macho-Stadler, Ines, 2003. "Endogenous formation of competing partnerships with moral hazard," Games and Economic Behavior, Elsevier, vol. 44(1), pages 183-194, July.
    15. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
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