Labour union, entry and consumer welfare

It is usually believed that the presence of a labour union makes firms as well as consumers worse off by increasing wages compared to the situation with no labour union. We show that the presence of a labour union may increase the incentive for entry and may also make consumers better off compared to the situation with no labour union if the labour productivity of the entrant is sufficiently higher to that of the incumbent.

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Year of publication:	2013
Authors:	Mukherjee, Arijit ; Wang, Leonard F.S.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 3, p. 603-605
Publisher:	Elsevier
Subject:	Entry \| Labour union \| Consumer surplus

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Type of publication:	Article
Classification:	F12 - Models of Trade with Imperfect Competition and Scale Economies ; L13 - Oligopoly and Other Imperfect Markets ; L40 - Antitrust Policy. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010681771