Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36730
Authors: 
Heitzler, Sven
Wey, Christian
Year of Publication: 
2010
Series/Report no.: 
DIW Discussion Papers 1008
Abstract: 
We analyze the bargaining problem of an incumbent firm and a union when the wage contract becomes generally binding. Our main application relates to competition among operators of mail delivery networks. We describe the Deutsche Post case which highlights the raising rivals' costs incentive and its consequences resulting from labor laws that make collective agreements generally binding. We show that minimum wages implemented by means of extension regulation are an effective deterrence instrument which frustrates both market entry as well as investments into the build-up of a mail delivery network.
Subjects: 
Minimum wages
postal services
collective bargaining
raising rivals' costs
JEL: 
L12
J52
K31
Document Type: 
Working Paper

Files in This Item:
File
Size
222.24 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.