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.