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Union Structure And The Incentives For Innovation In Oligopoly

Author

Listed:
  • Miguel González-Maestre

    (Universidad Autónoma de Barcelona)

  • Vicente Calabuig

    (Universitat de València)

Abstract

In this paper we consider the effect of union structure on the adoption of innovation in the context of Cournot duopoly. With a market size large enough we show that the incentive to innovate is higher under a decentralized union structure (with each firm facing its own independent union) than under an industry-wide union. However, for a small market size (or, equivalently, for sufficiently drastic potential innovation) the new technology is more likely to be adopted in the presence of a centralized union. This result goes against the conventional view that unionization harms the incentive to innovate.

Suggested Citation

  • Miguel González-Maestre & Vicente Calabuig, 2000. "Union Structure And The Incentives For Innovation In Oligopoly," Working Papers. Serie AD 2000-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2000-21
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2000-21.pdf
    File Function: Fisrt version / Primera version, 2000
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    References listed on IDEAS

    as
    1. Dowrick, Steve, 1993. "Enterprise Bargaining, Union Structure and Wages," The Economic Record, The Economic Society of Australia, vol. 69(207), pages 393-404, December.
    2. Dowrick, Steve & Spencer, Barbara J, 1994. "Union Attitudes to Labor-Saving Innovation: When Are Unions Luddites?," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 316-344, April.
    3. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-193.
    4. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July.
    5. Dowrick, Steve, 1989. "Union-Oligopoly Bargaining," Economic Journal, Royal Economic Society, vol. 99(398), pages 1123-1142, December.
    6. De Fraja, Giovanni, 1993. "Staggered vs. synchronised wage setting in oligopoly," European Economic Review, Elsevier, vol. 37(8), pages 1507-1522, December.
    7. Tauman, Y & Weiss, Y, 1987. "Labor Unions and the Adoption of New Technology," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 477-501, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Oligopoly; Unions; Innovation.;

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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