In this paper, we analyse the organization of the labour market in a general equilibrium model of a closed economy with two industries and two types of labour input. Workers are organized in industry- and skill-specific unions. The wage is set in cooperation either between identical labour types...

In this paper, we analyse the wage setting of a democratic labour union. The union members differ with respect to their employment probabilities. The union wage only changes if the parameters of the median member change. An exogenous shock to revenue may increase the wage, even if labour demand...