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Is wage-leadership an instrument to coordinate unions' wage-policy? The case of imperfect product markets

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  • Grandner, Thomas

Abstract

Given an oligopolistic product market, trade unions organized at firm level want to coordinate their wage bargaining activities, even if they are self interested. In this paper a situation is analysed, where for some exogenous reasons a complete centralization is not possible. Unions could try to coordinate wage-setting by "wage leadership". The outcome of such "wage leadership" is compared with the outcome of an uncoordinated bargaining and results in higher utilities for all unions. But the resulting wages and employment levels are not symmetrically neither for the unions nor for firms. Employment levels will change in different directions. In the "wage leader" firm employment falls and in the "follower" firm employment rises compared to an uncoordinated wage bargaining. This may cause problems with the implementation of "wage leadership". (author's abstract)

Suggested Citation

  • Grandner, Thomas, 1996. "Is wage-leadership an instrument to coordinate unions' wage-policy? The case of imperfect product markets," Department of Economics Working Paper Series 42, WU Vienna University of Economics and Business.
  • Handle: RePEc:wiw:wus005:58
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    References listed on IDEAS

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    Cited by:

    1. Rocha-Akis, Silvia, 2006. "Labour tax policies and strategic offshoring under unionised oligopoly," Department of Economics Working Paper Series 99, WU Vienna University of Economics and Business.
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    4. Hagemann, Harald, 2010. "L. Albert Hahn's Economic Theory of Bank Credit," Department of Economics Working Paper Series 134, WU Vienna University of Economics and Business.
    5. Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009. "Agglomeration and population ageing in a two region model of exogenous growth," VID Working Papers 0901, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
    6. Engelbert Stockhammer & Paul Ramskogler, 2009. "Post-Keynesian economics How to move forward," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 6(2), pages 227-246.
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    8. Grafeneder-Weissteiner, Theresa & Prettner, Klaus, 2010. "Agglomeration processes in aging societies," Department of Economics Working Paper Series 131, WU Vienna University of Economics and Business.
    9. Pasquale Commendatore & Ingrid Kubin & Carmelo Petraglia, 2009. "Footloose Capital and Productive Public Services," Chapters, in: Neri Salvadori & Pasquale Commendatore & Massimo Tamberi (ed.), Geography, Structural Change and Economic Development, chapter 1, Edward Elgar Publishing.
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    17. Grafeneder-Weissteiner, Theresa, 2010. "Demographic change, growth and agglomeration," Department of Economics Working Paper Series 132, WU Vienna University of Economics and Business.
    18. Smet, Koen, 2007. "Stuck in the middle? The structure of trade between South Africa and its major trading partners," Department of Economics Working Paper Series 115, WU Vienna University of Economics and Business.
    19. Figerl, Jürgen & Grandner, Thomas, 2008. "Job quality and wages in duopsony," Department of Economics Working Paper Series 121, WU Vienna University of Economics and Business.

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