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Wage formation in the context of collective bargaining

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Summary

The article analyzes wage developments resulting from collective bargaining between one union representing all employees and one employers' organization representing all employers. The context is an economy consisting of two markets: a labour market and a goods market. An analysis has been made of the costs and benefits for both parties in case of a strike. The strength of both parties has been analyzed, firstly under the assumption of perfect information and thereafter under the assumption of imperfect information. Important determinants of wage increases appear to be the strike costs, the horizon, the bargaining skills and the self confidence of both parties and the wage elasticity of the demand for labour.

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Authors and Affiliations

  1. University of Limburg, Germany

    P. Keizer (Associate Professor of Economics)

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  1. P. Keizer
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Additional information

I acknowledge the helpful comments of Professors Muysken, Kuipers and Pen.

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Keizer, P. Wage formation in the context of collective bargaining. De Economist 134, 191–213 (1986). https://doi.org/10.1007/BF01706289

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  • DOI: https://doi.org/10.1007/BF01706289

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