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.

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Year of publication:	2001-05-01
Authors:	MAULEON, Ana ; VANNETLEBOSCH, Vincent J.
Institutions:	Institut de Recherche Économique et Sociale (IRES), École des Sciences Économiques de Louvain
Subject:	Wages \| Bargaining \| Strikes \| Efficiency wages

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Extent:	application/pdf
Series:	Discussion Papers (IRES - Institut de Recherches Economiques et Sociales).
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) Number 2001010 6 pages long
Classification:	J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; J50 - Labor-Management Relations, Trade Unions, and Collective Bargaining. General ; J52 - Dispute Resolution: Strikes, Arbitration, and Mediation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004985350