Strategic Union Delegation and Incentives for Mergers
(2005)
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- Authors
- Abstract
- We consider a unionized duopoly model to analyze how unions affect the incentives for merger. We find that both firms will merge if and only if unions are weak. However, once surplus-maximizing unions have the option to delegate the wage bargaining to wage-maximizing delegates (such as senior union members), both firms may have incentives to merge even if the union bargaining power is strong. Moreover, the option of strategic delegation may harm both the unions and the firms.
- Affiliations
Citations
Mauleon, A., & Vannetelbosch, V. (2005). Strategic Union Delegation and Incentives for Mergers (ECON Discussion Papers 2005/12).