Welfare-enhancing trade unions in an oligopoly with excessive entry
"Trade unions are often argued to cause allocative inefficiencies and to lower welfare. We analyze whether this evaluation is also justified in a Cournot-oligopoly with free but costly entry. If input markets are competitive and output per firm declines with the number of firms (business steali...
| Main Authors: | , |
|---|---|
| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Munich
2019
CESifo |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19308487124911266699-Welfare-enhancing-trade-unions.htm |
| _version_ | 1771659901920083968 |
|---|---|
| author | de Pinto, Marco Goerke, Laszlo |
| author_facet | de Pinto, Marco Goerke, Laszlo |
| collection | Library items |
| description | "Trade unions are often argued to cause allocative inefficiencies and to lower welfare. We analyze whether this evaluation is also justified in a Cournot-oligopoly with free but costly entry. If input markets are competitive and output per firm declines with the number of firms (business stealing), there is excessive entry into such oligopoly. If trade unions raise wages above the competitive level, output and profits per firm decline, which could deter entry and thus improve welfare. We find that an increase in the union's bargaining power raises welfare if the (inverse) demand curve is (sufficiently) concave. We also show that collective bargaining loosens the linkage between business stealing and excessive entry." |
| format | TEXT |
| geographic | OECD countries |
| id | 19308487124911266699_a2d95abfa7d54cbb8afd15c7f3809393 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19308487124911266699_a2d95abfa7d54cbb8afd15c7f3809393 |
| is_hierarchy_title | Welfare-enhancing trade unions in an oligopoly with excessive entry |
| language | English |
| physical | 34 p. Digital |
| publishDate | 2019 |
| publisher | Munich CESifo |
| spellingShingle | de Pinto, Marco Goerke, Laszlo trade union role welfare state collective bargaining Welfare-enhancing trade unions in an oligopoly with excessive entry |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=138643595682 |
| title | Welfare-enhancing trade unions in an oligopoly with excessive entry |
| topic | trade union role welfare state collective bargaining |
| url | https://www.labourline.org/KENTIKA-19308487124911266699-Welfare-enhancing-trade-unions.htm |