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Union Wages, Hours of Work and the Effectiveness of Partial Coordination Agreements

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  • Sven Wehke

    () (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

Small monopoly trade unions decide upon the wage rate per hour and the hours of work subject to firm's demand for union members. Since the resulting Nash equilibrium is characterized by excess unemployment, we study the employment and welfare effects when trade unions try to coordinate their policies. Firstly, we consider a joint agreement about marginal wage moderation, where trade unions remain free to choose the hours of work non-cooperatively. Secondly, we analyze in which way a joint change in the hours of work affects employment and welfare if trade unions are free to choose the wage rate.

Suggested Citation

  • Sven Wehke, 2007. "Union Wages, Hours of Work and the Effectiveness of Partial Coordination Agreements," FEMM Working Papers 07019, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  • Handle: RePEc:mag:wpaper:07019
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    References listed on IDEAS

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    Cited by:

    1. repec:bla:scotjp:v:64:y:2017:i:2:p:115-142 is not listed on IDEAS
    2. Laszlo Goerke, 2016. "Sick Pay Reforms and Health Status in a Unionised Labour Market," IAAEG Discussion Papers until 2011 201604, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    3. Goerke, Laszlo & Hillesheim, Inga, 2013. "Relative consumption, working time, and trade unions," Labour Economics, Elsevier, vol. 24(C), pages 170-179.
    4. Laszlo Goerke, 2017. "Sick pay reforms and health status in a unionised labour market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 115-142, May.

    More about this item

    Keywords

    unemployment; wage setting; hours of work; partial cooperation;

    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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