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Do labour union recognition and bargaining deter entry in a network industry? A sequential game model

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  • Buccella, Domenico
  • Fanti, Luciano

Abstract

This study considers whether an incumbent firm can find it profitable to recognise a union and bargain over wages and employment, rather than to face a competitive labour market without unions. Using a sequential game model, this analysis shows that an incumbent firm may recognise a union to deter entry when network effects are sufficiently low.

Suggested Citation

  • Buccella, Domenico & Fanti, Luciano, 2020. "Do labour union recognition and bargaining deter entry in a network industry? A sequential game model," Utilities Policy, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:juipol:v:64:y:2020:i:c:s0957178720300205
    DOI: 10.1016/j.jup.2020.101025
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    More about this item

    Keywords

    Unionised oligopoly; Competitive labour market; Efficient bargaining; Market entry and entry deterrence;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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