Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207341 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12515
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper, we present a simple model in which a unionized and non-unionized firm optimally make investment decisions given their labor productivity. By allowing workers' organizations to have positive effects on labor effort, we find that the classic hold-up problem does not necessarily survive. We also derive conditions under which rent-seeking by unions may actually encourage firms' investments.
Subjects: 
labor unions
rent seeking
workers' effort
firms' investments
hold-up
JEL: 
J51
O31
O32
Document Type: 
Working Paper

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