In an international oligopoly model, we investigate how trade liberalisation impacts on collective bargaining outcomes when workers are represented by open shop unions. We find that, with intermediate levels of union density, trade liberalisation may lead to higher negotiated wages even if no...

This paper develops a model that incorporates workers' fair wage preferences into a general equilibrium framework with monopolistic competition between heterogeneous firms à la Melitz (2003). By assuming that the wage considered to be fair by workers depends on the productivity and thus the...

This paper extends the international oligopoly model to the situation of bargaining with an open shop union. Within this setting, we are able to investigate the implications of different levels of union density for both the equilibrium trade regime and wages. We then use this model to examine...