Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86854
Authors: 
Dobbelaere, Sabien
Luttens, Roland Iwan
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-041/3
Abstract: 
We introduce collective bargaining in a static framework where the firm and its risk-neutral employees negotiate over wages in a non-binding contract setting. Our main result is the equivalence between the non-binding collective equilibrium wage-employment contract and the equilibrium contract under binding risk-neutral efficient bargaining. We also demonstrate that our non-cooperative equilibrium wages and profits coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.
Subjects: 
Collective bargaining
union
firm
bargaining power
non-binding contract
JEL: 
C71
J51
L20
Document Type: 
Working Paper

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