Hamid Aghadadashli, Christian Wey

Multiunion Bargaining: Tariff Plurality and Tariff Competition

Volume 171 () / Issue 4, pp. 666-695 (30)

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We study (efficient) sequential bargaining between two unions and a single firm. If unions are perfectly substitutable (tariff competition), then there is a first-mover advantage and the second union is foreclosed. If unions are perfectly complementary (tariff plurality), then there is a second-mover advantage, so that the first union's wage bill is smaller than the second union's. If unions represent worker groups each producing a differentiated good, then overemployment (underemployment) occurs when goods are substitutable (complementary). Unions merge when workers are substitutable but stay separate when they are complementary, so that the inefficiencies associated with craft unionism persist.

Hamid Aghadadashli No current data available.

Christian Wey holds the Chair for Network Economics and Information and Communication Economics at the TU Berlin since 2003 and is Head of the Department for Information Society and Competition at the German Institute für Economic Research (DIW) in Berlin.