haku: @author Leach, J. / yhteensä: 2
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| Tekijä: | Leach, J. |
| Otsikko: | Inventories and wage bargaining |
| Lehti: | Journal of Economic Theory
1997 : AUG, VOL. 75:2, p. 433-463 |
| Asiasana: | INVENTORIES PAY BARGAINING |
| Kieli: | eng |
| Tiivistelmä: | This paper examines the relationship between inventories and bargaining. The union appropriates all of the rents when it can make a "take it or leave it" wage demand. The equilibrium wage rate falls as inventories rise because the concavity of the one-period revenue function implies that rents decline as inventories rise. The firm's strategic accumulation of inventories unambigiously reduces the welfare of the firm-union pair, because accumulation reduces the stream of rents without changing its distribution. There are no work stoppages if the union's opportunity cost of market work is sufficiently low. At higher opportunity costs there are periodic interruptions of production which limit the firm's inventories and raise the time path of wages. The model implies the existence of strikes which cannot be attributed to signalling or screening. |
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