Market Integration and Strike Activity

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 negociated 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.economic integration; product market competition; wage bargaining; strike activity

Product Market Integration, Wage Bargaining and Strike Activity

We develop a spatial two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigage the effects of separated product markets opening up for competition as well as of further market integration on the negotiated wage and the strike activity. We show that, when product markets are separated, the wage level and the strike activity are decreasing with the transportation cost and the home market size. However, when markets are integrated, wages and strikes are now increasing with the transportation cost. Finally, we find that the opening of markets for competition has an ambiguous impact on both the negotiated wage and the strike activity.economic integration;horizontal differentiation;product market competition;wage bargaining;strike activity

Union Delegation and Incentives for Merger

We analyze a unionized duopoly model to examine how unions affect the incentives for merger. We find that, once the union has the option to delegate, an increase in the union bargaining power can create incentives for the firms to merge.Union delegation;Wage bargaining;Mergers

Efficiency Wages, Unio-Firm Bargaining, and Strikes

We consider efficiency wage effects in a union-firm bargaining model with private information. We show that efficiency wage effects do not necessarily increase the wage level at equilibrium. However, if it is commonly known that the union is stronger than the firm and the productivity enhancing effects of paying higher wages are sufficiently large, then efficiency wage effects still increase the wage of equilibrium. More surprisingly, we show that efficiency wage effects increase the strike activity.Wages; Bargaining; Strikes; Efficiency wages

Market integration in network industries

What is the effect of product market integration on the market equilibrium in the presence of international network externalities in consumption? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.compatibility, horizontal differentiation, network effect

Strategic Union Delegation and Strike Activity

We develop a model of wage determination with private information, in which te 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 strike activity is greater whenever the union chooses wage-maximizing delegates instead of surplus-maximizing delegates. We also provide the necessary and sufficient condition such that it is always optimal for the union to choose wage-maximizing delegates and we we find that the efficiency loss due to strategic delegation may be quite important.Union delegation;Wage bargaining;Private information;Strike activity

Strike Activity and Bertrand vs Cournot Competition

We develop a model of wage determination with private information in a unionized imperfectly competitive industry. Under two different bargaining structures (firm-level vs industry-level), we investigate the effects of the degree of product differentiation and the type of market competition (Bertrand vs Cournot competition) on the negotiated wage and the strike activity. If the wage bargaining takes place at the industry-level, then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition. However, if the wage bargaining takes place at the firm-level, then wages and strikes are increasing with the degree of product differentiation, and the strike activity is smaller under Bertrand than under Cournot competition.Bertrand competition; Cournot competition; product differentiation; wage bargaining; strike activity

Bargaining with Endogenous Deadlines

We develop a two-person negotiation model with complete information which makes endogenous both the deadline and the level of surplus destruction after the deadline. We show that the equilibrium outcome is always unique but might be inefficient. Moreover, as the bargaining period becomes short or as the players become very patient, the unique outcome is always inefficientbargaining;alternating-offers;deadlines;complete infomation

Unions' relative concerns and strikes in wage bargaining

We consider a model of wage determination with private information in a duopoly. We investigate the effects of unions having relative concerns on the negotiated wage and the strike activity. We show that an increase of unions' relative concerns has an ambiguous effect on the strike activity.relative position, wage bargaining, private information, strike activity

Networks for Free Trade Agreements among Heterogeneous Countries

The paper examnes the formation of free trade agreements as a network formation game. We consider a three-country model in which international trade occurs between economies with imperfectly competitive product markets. Labor markets can be unionized and non-unionized in each country. We show that if all countries are of the same type (all of them are either unionized or non-unionized), the global free trade network is both the unique pairwise stable network and the unique efficient network. If some countries are unionized while others are non-unionized, other networks apart from the global free trade network are likely to be pariwise stable. however the efficient network is always the global free trade network. Thus, a conflict between stability and efficiency may occur. Moreover, starting from the network in which no country has signed a free trade agreement, all sequences of networks due to continuously profitable deviations to do not lead (in most cases) to the global free trade network, even when global free trade is stableFree-trade agreements, Network formation games, Unionization