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A note on unionized firms' incentive to integrate vertically

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  • Grandner, Thomas

Abstract

In this paper I analyze a vertically structured monopolized market with unionized firms. I compare two types of contracts: vertical integration and franchising. With franchising and wage bargaining at the firm level the union in the downstream firm is either very powerful or has no bargaining power at all, depending on the specific time structure of the model. These arguments could make integration preferable for the profit owners even if integration is accompanied by small transaction costs. (author's abstract)

Suggested Citation

  • Grandner, Thomas, 2000. "A note on unionized firms' incentive to integrate vertically," Department of Economics Working Paper Series 70, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus005:1276
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    References listed on IDEAS

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    Keywords

    vertical integration; trade unions;

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