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Why employees Prefer not to Bargain over Jobs


  • Dowrick, Steve


In general we expect efficient bargaining between a union and an employer to cover employment as well as wages. But employers may find that they win higher profits if they bargain over wages alone, since the threat of job losses can inhibit workers from pressing wage demands. This is shown to be the case in typical models which use the general (asymmetric) co-operative Nash-bargaining solution. So it is argued that the inclusion of jobs in bargaining is not just a question of efficiency, but also a question of power.

Suggested Citation

  • Dowrick, Steve, 1985. "Why employees Prefer not to Bargain over Jobs," The Warwick Economics Research Paper Series (TWERPS) 264, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:264

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    References listed on IDEAS

    1. Svejnar, Jan, 1986. "Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry," Econometrica, Econometric Society, vol. 54(5), pages 1055-1078, September.
    2. Oswald, A. J., 1995. "Efficient contracts are on the labour demand curve: Theory and facts," Labour Economics, Elsevier, vol. 2(1), pages 102-102, March.
    3. Sampson, Anthony A, 1983. "Employment Policy in a Model with a Rational Trade Union," Economic Journal, Royal Economic Society, vol. 93(37), pages 297-311, June.
    4. Gylfason, Thorvaldur & Lindbeck, Assar, 1984. "Union Rivalry and Wages: An Oligopolistic Approach," Economica, London School of Economics and Political Science, vol. 51(202), pages 129-139, May.
    5. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    6. repec:fth:prinin:175 is not listed on IDEAS
    7. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-595, September.
    8. Martin J. Osborne, 1984. "Capitalist-Worker Conflict and Involuntary Unemployment," Review of Economic Studies, Oxford University Press, vol. 51(1), pages 111-127.
    9. Andrew Oswald, 1984. "Efficient Contracts are on the Labour Demand Curve: Theory and Facts," Working Papers 555, Princeton University, Department of Economics, Industrial Relations Section..
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    Cited by:

    1. Chi-Hsin Wu & Chia-Ying Liu, 2010. "Do Trade Unions Deteriorate International Competitiveness? Reconciliation of the Discrepancy Between Theory and Practice," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(2), pages 145-155, June.

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