Strategic Union Delegation and Strike Activity

25 Pages Posted: 25 Jan 2005

See all articles by Ana Mauleon

Ana Mauleon

Université Saint-Louis - Bruxelles; Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Vincent J. Vannetelbosch

Center for Operations Research and Econometrics (CORE)

Abstract

We develop a model of wage determination with private information, in which the union has the option to delegate the wage bargaining to either surplus-maximizing delegates or to wage-maximizing delegates (such as senior union members). We show that the wage outcome in case of surplus-maximizing delegates is not necessarily smaller than the wage outcome in case of wage-maximizing delegates, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the union is stronger than the firm and the demand is sufficiently elastic, then delegating to wage-maximizing delegates definitely increases the wage at equilibrium. The maximum delay in reaching an agreement is greater whenever the union chooses wage-maximizing delegates instead of surplus-maximizing delegates and remains finite even when the period length shrinks to zero.

JEL Classification: C70, C71, C72, C78

Suggested Citation

Mauleon Echeverria, Ana Carmen and Vannetelbosch, Vincent J., Strategic Union Delegation and Strike Activity. Canadian Journal of Economics, Vol. 38, No. 1, pp. 149-173, February 2005. Available at SSRN: https://ssrn.com/abstract=654072

Ana Carmen Mauleon Echeverria (Contact Author)

Université Saint-Louis - Bruxelles ( email )

Brussels, 1000
Belgium

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Vincent J. Vannetelbosch

Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
1348 Louvain-la-Neuve, 1348
Belgium

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