No. 24/2002
WAGE BARGAINING AND EMPLOYER OBJECTIVES
Torberg Falch
Abstract:
This paper compares union wage bargaining outcomes across different types
of employers. Five different employer objectives are discussed; profit,
welfare and output maximization,
and two specifications of a Leviathan. The model shows that the ordering
of the union wage level across employer types depends on the functional
form of product demand. With constant
elasticity of product demand, the wage tends to be lowest in the output
maximization case, while with a linear product demand, the wage tends
to be lowest under welfare maximization.
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