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Union Formation and Bargaining Rules in the Labor Market

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  • Chica Páez, Yolanda
  • Espinosa Alejos, María Paz

Abstract

This paper analyzes union formation in a model of bargaining between a firm and several unions. We address two questions: first, the optimal configuration of unions (their number and size) and, second, the impact of the bargaining pattern (simultaneous or sequential). For workers, grouping into several unions works as a price discrimination device which, at the same time, decreases their market power. The analysis shows that optimal union configuration depends on the rules that regulate the bargaining process (monopoly union, Nash bargaining or right to manage).

Suggested Citation

  • Chica Páez, Yolanda & Espinosa Alejos, María Paz, 2005. "Union Formation and Bargaining Rules in the Labor Market," DFAEII Working Papers 2005-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
  • Handle: RePEc:ehu:dfaeii:6745
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    File URL: https://addi.ehu.es/handle/10810/6745
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, 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.
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    6. Brown, James N & Ashenfelter, Orley, 1986. "Testing the Efficiency of Employment Contracts," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 40-87, June.
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    28. repec:wsi:igtrxx:v:02:y:2000:i:01:n:s0219198900000068 is not listed on IDEAS
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    Cited by:

    1. canegrati, emanuele, 2006. "The Single Mindedness Theory of Labor Unions," MPRA Paper 1224, University Library of Munich, Germany.

    More about this item

    Keywords

    union formation; sequential bargaining; nash bargaining; monopoly union;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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