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Why Employers Prefer Not To Bargain Over Jobs

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  • Dowrick, Steve

Abstract

In general we expect efficient bargaining between a union and an employer to cover employment as well as wages. But employers may find that they win higher profits if they bargain over wages alone, since the threat of job losses can inhibit workers from pressing wage demands. This is shown to be the case in typical models which use the general (asymmetric) co-operative Nash-bargaining solution. So it is argued that the inclusion of jobs in bargaining is not just a question of efficiency, but also a question of power.
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Suggested Citation

  • Dowrick, Steve, 1985. "Why Employers Prefer Not To Bargain Over Jobs," Economic Research Papers 269229, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269229
    DOI: 10.22004/ag.econ.269229
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    References listed on IDEAS

    as
    1. Svejnar, Jan, 1986. "Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry," Econometrica, Econometric Society, vol. 54(5), pages 1055-1078, September.
    2. Oswald, A. J., 1995. "Efficient contracts are on the labour demand curve: Theory and facts," Labour Economics, Elsevier, vol. 2(1), pages 102-102, March.
    3. repec:fth:prinin:175 is not listed on IDEAS
    4. repec:bla:econom:v:51:y:1984:i:202:p:129-39 is not listed on IDEAS
    5. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-595, September.
    6. Sampson, Anthony A, 1983. "Employment Policy in a Model with a Rational Trade Union," Economic Journal, Royal Economic Society, vol. 93(37), pages 297-311, June.
    7. Martin J. Osborne, 1984. "Capitalist-Worker Conflict and Involuntary Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(1), pages 111-127.
    8. Andrew Oswald, 1984. "Efficient Contracts are on the Labour Demand Curve: Theory and Facts," Working Papers 555, Princeton University, Department of Economics, Industrial Relations Section..
    9. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
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    Cited by:

    1. Chi-Hsin Wu & Chia-Ying Liu, 2010. "Do Trade Unions Deteriorate International Competitiveness? Reconciliation of the Discrepancy Between Theory and Practice," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(2), pages 145-155, June.

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    Keywords

    Labor and Human Capital; Public Economics;

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