Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2011-02-18
Number: 11-041/3
Author-Name: Sabien Dobbelaere
Author-Workplace-Name: VU University Amsterdam
Author-Name: Roland Iwan Luttens
Author-Workplace-Name: Ghent University, CORE - Cath. University Louvain
Title: Collective Bargaining under Non-binding Contracts
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.
Classification-JEL: C71, J51, L20
Keywords: Collective bargaining, union, firm, bargaining power, non-binding contract
File-Url: https://papers.tinbergen.nl/11041.pdf
File-Format: application/pdf
File-Size: 179602 bytes
Handle: RePEc:tin:wpaper:20110041