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Endogenous Wage-Bargaining Institutions in Oligopolistic Sectors

Author

Listed:
  • Emmanuel Petrakis

    (Department of Economics, University of Crete, Greece)

  • Minas Vlassis

    (Department of Economics, University of Ioannina, Greece)

Abstract
This paper explores the endogenous emergence of wage bargaining institutions in sectors with market power. We show that asymmetries in firms’ productivity and in unions’ risk aversion and/or bargaining power may generate various degrees of centralization in wage bargaining, which are often observable in real life. In the presence of such asymmetries, a winning coalition of all the unions and (typically) the efficient firms has an incentive to establish wage bargaining centralization at the sectoral level. If productivity differences are high enough, wage bargaining may also occur at the firm level, but only regarding the efficient firms. Otherwise, a completely centralized structure prevails and the sectoral wage deal is simply confirmed by all firms and unions. However, if the sources of asymmetry “cancel out”, decentralized wage bargaining is sustained in equilibrium.

Suggested Citation

  • Emmanuel Petrakis & Minas Vlassis, "undated". "Endogenous Wage-Bargaining Institutions in Oligopolistic Sectors," Working Papers 0105, University of Crete, Department of Economics, revised 00 Dec 2001.
    • Handle: RePEc:crt:wpaper:0105
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    References listed on IDEAS

    as
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    10. Vlassis, Minas, 1996. "Endogenous wage-bargaining institutions in oligopolistic industries," UC3M Working papers. Economics 6014, Universidad Carlos III de Madrid. Departamento de Economía.
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    More about this item

    Keywords

    Wage Negotiations; Bargaining Institutions; Unions; Oligopoly; Minimum Wage.;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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