Note on a generalized wage rigidity result

Considering Cournot competition, this note shows that, if the firms differ inlabor productivities, the equilibrium wage rates under a centralized labor union are notindependent of the number of firms and product differentiation if the labor unioncharges a uniform wage rate. However, if the centralized labor union can discriminatewage rate between the firms, the equilibrium wage rates do not depend on the numberof firms and product differentiation. Hence, the wage rigidity result of Dhillon andPetrakis (2002) may not be robust with respect to the asymmetry in firms, which isperhaps more common than symmetry considered by them...