Gradual collective wage bargaining

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Abstract

This paper presents an alternative implementation of firm-level collective wage bargaining, where bargaining proceeds as a finite sequence of sessions between a firm and a union of variable size. We investigate the impact of such a 'gradual' union on the wage-employment contract in an economy with concave production. In a static framework, the resulting equilibrium is equivalent to the efficient bargaining outcome. In a dynamic framework with search frictions, we demonstrate that gradual collective wage bargaining coincides with all-or-nothing bargaining when bargaining takes place in fictitious time before production.
Original languageEnglish
Pages (from-to)37-42
JournalLabour Economics
Volume40
Issue numberJune
DOIs
Publication statusPublished - 2016

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