IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Comparison Wage in Trade Union Decision Making

  • Drakopoulos, Stavros A.

The starting point of this paper is the idea that trade unions and individual workers pay attention to wage settlements in similar sectors of the economy. The foundations of this concept can be found in other social sciences and also in the literature of psychological economics. However, it has not received much attention in connection to union decision making. This comparison or reference wage enters the decision making of the union (i.e. the union utility function). In this paper, we employ a union utility function which incorporates this concept. The analysis is conducted in a bargaining framework and the results show the effects on the optimal wage of important variables like comparison wage, unemployment benefit, union power and of the weight that the union places on the comparison wage

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46287.

in new window

Date of creation: 2007
Date of revision:
Publication status: Published in Acta Oeconomica 4.57(2007): pp. 377-388
Handle: RePEc:pra:mprapa:46287
Contact details of provider: Postal:
Ludwigstraße 33, D-80539 Munich, Germany

Phone: +49-(0)89-2180-2459
Fax: +49-(0)89-2180-992459
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Lindbeck, A, 1996. "Incentives and Social Norms in Household Behavior," Papers 622, Stockholm - International Economic Studies.
  2. Cooper, B. & Garcia-Penalosa, C., 1998. "Status Effects and Neganive Utility Growth," Economics Papers 150, Economics Group, Nuffield College, University of Oxford.
  3. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  4. Alois Stutzer, . "The Role of Income Aspirations in Individual Happiness," IEW - Working Papers 124, Institute for Empirical Research in Economics - University of Zurich.
  5. Layard, Richard, 1980. "Human Satisfactions and Public Policy," Economic Journal, Royal Economic Society, vol. 90(363), pages 737-50, December.
  6. Lommerud, K.E., 1988. "Educational Subsidies When Relative Income Matters," Papers 05-88, Norwegian School of Economics and Business Administration-.
  7. Holmlund, B. & Skedinger, P., 1988. "Wage Bargaining And Wage Drift: Evidence From The Swedish Wood Industry," Papers 419, Stockholm - International Economic Studies.
  8. Bruce E. Kaufman, 1989. "Models of Man in Industrial Relations Research," ILR Review, Cornell University, ILR School, vol. 43(1), pages 72-88, October.
  9. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  10. Kapteyn, Arie & Wansbeek, Tom, 1982. "Empirical evidence on preference formation," Journal of Economic Psychology, Elsevier, vol. 2(2), pages 137-154, June.
  11. Skott, Peter, . "Fairness as a source of hysteresis in employment and relative wages," Economics Working Papers 2003-6, Department of Economics and Business Economics, Aarhus University.
  12. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
  13. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  14. A L Booth & M Chatterji, . "Union Membership And Wage Bargaining When Membership Is Not Compulsory," Dundee Discussion Papers in Economics 048, Economic Studies, University of Dundee.
  15. Drakopoulos, S A, 1994. " Hierarchical Choice in Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 8(2), pages 133-53, June.
  16. de la Croix, David, 1994. " Wage Interdependence through Decentralized Bargaining," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 371-403, December.
  17. van de Stadt, Huib & Kapteyn, Arie & van de Geer, Sara, 1985. "The Relativity of Utility: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 179-87, May.
  18. de la Croix, David & Palm, Franz & Urbain, Jean-Pierre, 1996. "Labor market dynamics when effort depends on wage growth comparisons," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1996019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Sep 1996.
  19. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
  20. Lawrence H. Summers, 1988. "Relative Wages, Efficiency Wages, and Keynesian Unemployment," NBER Working Papers 2590, National Bureau of Economic Research, Inc.
  21. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  22. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, vol. 107(445), pages 1832-47, November.
  23. Fitzenberger, Bernd & Franz, Wolfgang, 1999. "Industry-Level Wage Bargaining: A Partial Rehabilitation--The German Experience," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 437-57, September.
  24. Chappell, David & Sampson, Anthony A., 1990. "Wage rounds : A signalling interpretation," Economics Letters, Elsevier, vol. 32(4), pages 389-392, April.
  25. Oswald, Andrew J, 1979. "Wage Determination in an Economy with Many Trade Unions," Oxford Economic Papers, Oxford University Press, vol. 31(3), pages 369-85, November.
  26. Clark, Andrew E. & Oswald, Andrew J., 1998. "Comparison-concave utility and following behaviour in social and economic settings," Journal of Public Economics, Elsevier, vol. 70(1), pages 133-155, October.
  27. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
  28. David de la CROIX, 1993. "Wage Interdependence and Competitiveness," Discussion Papers (REL - Recherches Economiques de Louvain) 1993041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  29. Drakopoulos, S. A. & Theodossiou, I., 1997. "Job satisfaction and target earnings," Journal of Economic Psychology, Elsevier, vol. 18(6), pages 693-704, November.
  30. Hart,Robert A. & Moutos,Thomas, 1995. "Human Capital, Employment and Bargaining," Cambridge Books, Cambridge University Press, number 9780521453264, September.
  31. Jean-Pierre Danthine & André Kurmann, 2003. "Fair Wages in a New Keynesian Model of the Business Cycle," Cahiers de recherche 0320, CIRPEE.
  32. Altman, Morris, 2001. "A behavioral model of labor supply: casting some light into the black box of income-leisure choice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 30(3), pages 199-219, May.
  33. Gylfason, Thorvaldur & Lindbeck, Assar, 1984. "Competing wage claims, cost inflation, and capacity utilization," European Economic Review, Elsevier, vol. 24(1), pages 1-21.
  34. Earl, P.E., 1990. "Economics And Psychology: A Survey," Papers 1990-04, Tasmania - Department of Economics.
  35. Corneo, Giacomo & Jeanne, Olivier, 2001. "On relative-wealth effects and long-run growth," Research in Economics, Elsevier, vol. 55(4), pages 349-358, December.
  36. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
  37. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
  38. Robert J. Flanagan, 1976. "Wage Interdependence in Unionized Labor Markets," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(3), pages 635-682.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:46287. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.