The Economics of First-Contract Mediation

Tinbergen Institute Discussion Paper TI 13-096/VII

15 Pages Posted: 20 Jul 2013

See all articles by Sabien Dobbelaere

Sabien Dobbelaere

Vrije Universiteit Amsterdam - Department of Economics; Tinbergen Institute; IZA Institute of Labor Economics

Roland Luttens

Amsterdam University College - VU University Amsterdam

Multiple version iconThere are 2 versions of this paper

Date Written: July 19, 2013

Abstract

This paper provides an economic foundation for non-binding mediation to stimulate first collective bargaining agreements, as implemented in British Columbia since 1993. We show that the outcome of first-contract mediation is Pareto efficient and proves immune to the insider-outsider problem of underhiring. We also demonstrate that equilibrium wages and profits under mediation coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.

Keywords: BC first-contract model, mediation, collective bargaining, union, non-binding contract

JEL Classification: C71, J51, L20, K12

Suggested Citation

Dobbelaere, Sabien and Luttens, Roland, The Economics of First-Contract Mediation (July 19, 2013). Tinbergen Institute Discussion Paper TI 13-096/VII. Available at SSRN: https://ssrn.com/abstract=2295902 or http://dx.doi.org/10.2139/ssrn.2295902

Sabien Dobbelaere (Contact Author)

Vrije Universiteit Amsterdam - Department of Economics ( email )

De Boelelaan 1105
NL- Amsterdam, NL-1081 HV
Netherlands
0031 20 598 28 74 (Phone)

Tinbergen Institute

Keizersgracht 482
NL- Amsterdam, NL-1017 EG
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
D- Bonn, 53072
Germany

Roland Luttens

Amsterdam University College - VU University Amsterdam ( email )

Plantage Muidergracht 14
Amsterdam, 1018TV
Netherlands

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