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Chamberlinian Imperfect Competition Among Rational Firm-Workers Coalitions: Is Underbidding by Unemployed Workers Less Effective?

Author

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  • S. Curatolo

    ()

Abstract

Macroeconomic models with imperfect competition usually result in theoretical own-price elasticities of labour demand higher than one in absolute value. Yet often empirical studies find much lower estimated elasticities. A Chamberlinian two sectors model of imperfect competition with decentralised wage bargaining on labour productivity is here developed and the results show that lower theoretical elasticities are faced by rational firm-workers coalitions. Thus a lower effectiveness of underbidding by unemployed workers is theoretically suggested. Moreover an higher long term dependence of employment on nominal shocks is an other feature suggested by the model’s results.

Suggested Citation

  • S. Curatolo, 2001. "Chamberlinian Imperfect Competition Among Rational Firm-Workers Coalitions: Is Underbidding by Unemployed Workers Less Effective?," Economics Department Working Papers 2001-EP05, Department of Economics, Parma University (Italy).
  • Handle: RePEc:par:dipeco:2001-ep05
    as

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    More about this item

    Keywords

    elasticity of labour demand; Long term; Imperfect competition; Chamberlin; Wage bargaining; Labour productivity; Firm-workers coalitions; Rationality;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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