Union Bargaining Strength as a Public Good: Experimental Evidence
When collective agreements apply to all employees, whether unionized or not, what is the rationale behind joining a union? The paper presents an experiment on a two-stage game. In the first stage, the decision to join a union is modeled as a voluntary contribution to a public good. In the second stage, the unionized employees bargain with the employer over wages. The experimental evidence reveals that: i) the union density is higher than predicted by theory but declining over time, ii) the size of the union increases the employees' bargaining power but not as much as predicted.
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|Date of creation:||17 Mar 1999|
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|Note:||Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.|
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