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Choice of union-firm bargaining agenda and social welfare

Author

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  • Rupayan Pal

    (Gokhale Institute of Politics & Economics, India)

Abstract

This paper shows that with a strong labour union, bargaining over piece rate generates higher social welfare than bargaining over fixed wage. Moreover, this social welfare exceeds the social welfare under efficient bargaining level, if the union is very strong.

Suggested Citation

  • Rupayan Pal, 2005. "Choice of union-firm bargaining agenda and social welfare," Public Economics 0507014, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0507014
    Note: Type of Document - pdf; pages: 8
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0507/0507014.pdf
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    References listed on IDEAS

    as
    1. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    2. M. Ryan Haley, 2003. "The Response of Worker Effort to Piece Rates: Evidence from the Midwest Logging Industry," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
    3. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    4. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    5. Bruce Shearer, 2004. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 513-534.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Appelbaum, Elie, 2011. "Union-firm bargaining: Order of play and efficiency," Games and Economic Behavior, Elsevier, vol. 71(2), pages 235-245, March.

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    More about this item

    Keywords

    Bargaining; Fixed wage; Piece rate; Social welfare; Union;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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