Union oligopoly and entry in the presence of homogeneous labor

Ana Paula MARTINS

Abstract


Abstract. The analysis discusses the labor market equilibrium under union oligopoly, where unions represent homogeneous workers and use employment strategies. The following points are addressed: 1. The labor market outcomes in the presence of; a. uncooperative behavior among unions; b. uncooperative environment with a leading union; c. collusive (coordinated unions) behavior among unions; d. globally efficient bargaining, are confronted. A specific example with a Stone-Geary utility function and linear demand is forwarded. 2. Supply dynamics may push up employment and, therefore, the number of unions. In equilibrium, some bounds exist to the number of unions the market can support, which are investigated in the example. Five supply dynamics are considered: a. reservation wage restriction; b. a standard labor supply constraint; c. number of unions equal demand; d. individualistic unions; e. existence of a minimum (employed) membership requirement. The equilibrium number of unions for the Cournot-Nash, Stackelberg and efficient bargaining structures is derived for the case where unions exhibit Stone-Geary preferences and labor demand is linear.

Keywords. Unions, Wage determination models, Union bargaining, Corporatism, Imperfect competition and union behavior. Union oligopoly.

JEL. J51, E24, D49, C79.

Keywords


Unions; Wage determination models; Union bargaining; Corporatism; Imperfect competition and union behavior; Union oligopoly.

Full Text:


References


Davidson, C. (1988). Multiunit bargaining in oligopolistic industries. Journal of Labor Economics, 6(3), 397-422. doi. 10.1086/298189

Dixon, H. (1988). Unions, oligopoly and the natural range of employment. Economic Journal, 98(393), 1127-1147. doi. 10.2307/2233723

Dobson, P.W. (1994). Multifirm unions and the incentive to adopt pattern bargaining in oligopoly. European Economic Review, 38(1), 87-100. doi. 10.1016/0014-2921(94)90007-8

Dowrick, S. (1989). Union-oligopoly bargaining. Economic Journal, 99(398), 1123-1142. doi. 10.2307/2234092

Friedman, J. (1983) Oligopoly Theory. Cambridge: Cambridge University.

Gylfason, T., & Lindbeck, A. (1984a). Competing wage claims, cost inflation and capacity utilization. European Economic Review, 24(1), 1-21. doi. 10.1016/0014-2921(84)90010-2

Gylfason, T., & Lindbeck, A. (1984b). Union rivalry and wages: An oligopolistic approach. Economica, 51, 129-139. doi.

Hart, O. (1982). A model of imperfect competition with Keynesian features. Quarterly Journal of Economics, 97(202), 109-138. doi. 10.2307/2554205

Jun, B.H. (1989). Non-cooperative bargaining and union formation. Review of Economic Studies, 56(1), 59-76. doi. 10.2307/2297749

Lindbeck, A., & Snower, D.J. (1990). The Insider-Outsider Theory of Employment and Unemployment. Macmillan.

Martins, A.P. (1998). Union duopoly with heterogeneous labor. Working Paper, No.88.98. Lisboa, Universidade Católica Portuguesa.

Martins, A.P., & Coimbra, R. (1997). Union duopoly with homogeneous labor. Working Paper, No.84.97. Lisboa, Universidade Católica Portuguesa.

Oswald, A.J. (1979). Wage determination in an economy with many trade unions. Oxford Economic Papers, 31(3), 369-85. doi. 10.1093/oxfordjournals.oep.a041454

Rosen, S. (1970). Unionism and the occupational wage structure in the United States. International Economic Review, 11(2), 269-286. doi. 10.2307/2525669

Solow, R.M. (1985). Insiders and outsiders in wage determination. Scandinavian Journal of Economics, 87(2), 411-428. doi. 10.2307/3439843

Svejnar, J. (1986). Bargaining power, fear of disagreement, and wage settlements: Theory and evidence from U.S. industry. Econometrica, 54(5), 1055-1078. doi. 10.2307/1912322




DOI: http://dx.doi.org/10.1453/jepe.v7i1.2027

Refbacks

  • There are currently no refbacks.




.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics and Political Economy - J. Econ. Pol. Econ. - JEPE - www.kspjournals.org

ISSN: 2148-8347

Editor: jepe@ksplibrary.org   Secretarial: secretarial@ksplibrary.org   Istanbul - Turkey.

Copyright © KSP Library