Pattern Bargaining

17 Pages Posted: 21 Apr 2004

See all articles by Robert C. Marshall

Robert C. Marshall

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Antonio Merlo

University of Pennsylvania - Department of Economics; Rice University

Multiple version iconThere are 2 versions of this paper

Abstract

Many unions in the United States have for several years engaged in what is known as pattern bargaining. In this article, we show that pattern bargaining is preferred by a union to both simultaneous industry-wide negotiations and sequential negotiations without a pattern. Allowing for interfirm productivity differentials within an industry, we show that for small differentials, the union most prefers a pattern in wages, but for a sufficiently wide differential, the union prefers a pattern in labor costs. Finally, we demonstrate that pattern bargaining can be a significant entry deterrent. This provides an explanation for why incumbent firms in an industry may support the use of pattern bargaining in labor negotiations.

Suggested Citation

Marshall, Robert C. and Merlo, Antonio M., Pattern Bargaining. Available at SSRN: https://ssrn.com/abstract=513586

Robert C. Marshall (Contact Author)

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-0030 (Phone)
814-865-0013 (Fax)

Antonio M. Merlo

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7933 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.ssc.upenn.edu/~merloa

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
15
Abstract Views
807
PlumX Metrics