Market Integration and Strike Activity
CORE Discussion Paper No. 2005/36
25 Pages Posted: 9 Aug 2005
Date Written: May 2005
We consider a two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigate the effects of separated product markets opening up for competition as well as of further market integration on the negotiated wage and the maximum delay in reaching an agreement. From an initial situation of reciprocal intra-industry trade, an increase in product market integration will decrease the maximal delay in reaching an agreement. However, markets opening up for competition have an ambiguous effect on both the wage outcome and the maximum real delay time in reaching an agreement.
Keywords: Economic integration, product market competition, wage bargaining, strike activity
JEL Classification: C78, F15, J50, J52, L13
Suggested Citation: Suggested Citation