Abstract (EN):
Despite the major concern of the competition authority to forbid and prosecute formal
cartels who cooperatively fix prices, limit production or divide markets, there seems to
be little regulation and investigation of collusive practices in the labor market. For that
reason, this article analyzes the economic effects of cooperative wage fixing in
industries that use one type of labor as the only input, while the other assumptions are
kept as general as possible. Under the one input assumption it was found that collusion
in the labor market and collusion in the product market have exactly the same results,
which include the rise in prices and the fall in output, employment and wages. The
higher prices and lower wages in cartelized industries are not only associated with the
elimination of the well known business stealing effect, but also with the elimination of
the labor force stealing effect. The conclusions in this paper can be generalized to
industries that use more than one input, as long as the cartel is able to fix the prices of
all the inputs.
Idioma:
Inglês
Tipo (Avaliação Docente):
Científica
Notas:
http://connection.ebscohost.com/c/articles/93289577/theory-collusion-labor-market
Nº de páginas:
26