Theory of semi-collusion in the labor market

• Type: Academic Work
• Date: 2014

Authors

Pedro Gonzaga (Author) FEP; António Brandão (Author) FEP; Helder Vasconcelos (Author) FEP

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Associated Institutions

FEP - Faculdade de Economia da Universidade do Porto

Other information

Abstract (EN): We study the effects of cooperative wage setting in industries that use two different types of labor. In particular, we consider a two-stage game where firms hire nonspecialized workers in a perfectly competitive labor market and specialized workers that are more productive and expensive, but whose wages can be cooperatively determined by firms. It is shown that semi-collusion leads to lower wages and employment of specialized labor, lower production levels and higher prices, due to the elimination of the business stealing effect, labor force stealing effect and as a result of a dynamic effect that is specific to semi-collusive games.

Language: English

Type (Professor's evaluation): Scientific

Notes: http://wps.fep.up.pt/wps/wp522.pdf