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Aghadadashli, Hamid
Wey, Christian
Year of Publication: 
Series/Report no.: 
DICE Discussion Paper No. 138
We study sequential bargaining between two unions and a single firm. Parties bargain bilaterally and efficiently (over wage and employment). The unions' workforces can be substitutable (tariff competition) or complementary (tariff plurality or craft unionism). If unions are substitutable, then too many workers from the first union are employed at the cost of employment from the second union (with overall overemployment). If unions are complementary, then employment of both unions is reduced (with overall underemployment). Unions merge when workers are substitutable but stay separate if complementary, so that the inefficiencies associated with craft unionism persist.
Document Type: 
Working Paper

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