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Wage-Employment Bargaining in a Unionized Oligopoly and International Market Integration

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  • Gürtzgen, Nicole

Abstract

In a framework of a n-union/n-firm oligopoly, this paper analyzes the incentive for firms and unions to adopt efficient bargaining, i.e. negotiating over wages together with employment. The analysis is conducted for the case of autarchy and for an integrated product market. Firm profits, union utility and industry rents are compared under two different bargaining regimes - the right-to-manage model and the efficient bargaining model. For centralized negotiations, it is shown that under autarchy bargaining over wages and employment does not necessarily imply efficiency as total industry rents decrease. In the case of an integrated product market, however, adopting efficient bargaining raises rents if the market share of the domestic industry is relatively small.

Suggested Citation

  • Gürtzgen, Nicole, 1998. "Wage-Employment Bargaining in a Unionized Oligopoly and International Market Integration," Thuenen-Series of Applied Economic Theory 17, University of Rostock, Institute of Economics.
    • Handle: RePEc:zbw:roswps:17
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    More about this item

    Keywords

    Trade Unions; Oligopoly; Efficient Bargaining; Integration;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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