Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/155765 
Year of Publication: 
2017
Series/Report no.: 
Economics Discussion Papers No. 2017-9
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
In an industry characterised by the presence of network effects, this paper investigates a duopolistic game in which firms may choose whether to bargain over wages and employment with unions or to face a competitive labour market (i.e. without unions). If unions are sufficiently risk-averse, it is shown that the presence of strong network effects makes unionisation the Pareto-efficient sub-game perfect Nash equilibrium outcome for firms. The issue of entry is also investigated.
Subjects: 
unionised oligopoly
competitive labour market
efficient bargaining
market entry and entry deterrence
JEL: 
J51
L13
L20
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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