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Labor Unionization Structure, Innovation, and Welfare

Author

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  • Tien-Der Han
  • Arijit Mukherjee

Abstract

We show the effects of cooperation among the labor unions with complementary workers on innovation, consumer surplus, and welfare. Although cooperation among the unions reduces wages, it may either increase or decrease the firm's incentive for innovation, and may also make the consumers and the society worse off by reducing innovation. While cooperation (compared to noncooperation) among the unions makes the workers better off, it may not make all final-goods producers better off.

Suggested Citation

  • Tien-Der Han & Arijit Mukherjee, 2017. "Labor Unionization Structure, Innovation, and Welfare," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(2), pages 279-300, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201706)173:2_279:lusiaw_2.0.tx_2-
    DOI: 10.1628/093245616X14785139493983
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    Citations

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    Cited by:

    1. Shohei Yoshida, 2018. "Bargaining power and firm profits in asymmetric duopoly: an inverted-U relationship," Journal of Economics, Springer, vol. 124(2), pages 139-158, June.
    2. Han, Tien-Der & Mukherjee, Arijit, 2023. "Mergers of complements, endogenous product differentiation and welfare," Mathematical Social Sciences, Elsevier, vol. 126(C), pages 30-41.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • 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
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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