Bilateral delegation in wage and employment bargaining in monopoly

Bibhas Saha, Ishita Chatterjee

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Abstract

We study efficiency and distributional implications of bilateral delegation in wage and employment bargaining in monopoly. Delegation causes underproduction, and the bargaining pie severely contracts rendering mutual gains from delegation impossible. With an increase in the union’s bargaining power profit may perversely rise and the union’s utility may fall.
Original languageEnglish
Pages (from-to)280-283
Number of pages4
JournalEconomics Letters
Volume120
Issue number2
DOIs
Publication statusPublished - Aug 2013

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