Unionization Structures in International Oligopoly

17 Pages Posted: 31 Jan 2013

See all articles by Christian Wey

Christian Wey

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE)

Date Written: March 2013

Abstract

We examine how competition in international markets affects a union's choice of wage regime, which can be either uniform or discriminatory. Firms are heterogeneous with regard to international competition. When unions choose their wage regimes sequentially, a discriminatory outcome becomes more likely when international competition increases. However, for intermediate levels a union may stick with a uniform wage regime even if the rival union adopts a discriminatory regime. When competition is sufficiently intense, both unions revert to the discriminatory regime. Paradoxically only in those latter instances all parties (consumers, workers, and firms) may be better off (each in aggregate) if all unions adopt a uniform wage regime. We conclude that union incentives to coordinate their wage regimes should then also become largest.

JEL Classification: D43, J51, L13

Suggested Citation

Wey, Christian, Unionization Structures in International Oligopoly (March 2013). LABOUR, Vol. 27, Issue 1, pp. 1-17, 2013, Available at SSRN: https://ssrn.com/abstract=2209628 or http://dx.doi.org/10.1111/j.1467-9914.2012.00558.x

Christian Wey (Contact Author)

University of Düsseldorf - Düsseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany
+49-211-81-15009 (Phone)
+49-211-81-15499 (Fax)

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