Pattern bargaining

Robert C. Marshall, Antonio Merlo

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Many unions in the United States have for several years engaged in what is known as pattern bargaining. In this article, we show that pattern bargaining is preferred by a union to both simultaneous industry-wide negotiations and sequential negotiations without a pattern. Allowing for interfirm productivity differentials within an industry, we show that for small differentials, the union most prefers a pattern in wages, but for a sufficiently wide differential, the union prefers a pattern in labor costs. Finally, we demonstrate that pattern bargaining can be a significant entry deterrent. This provides an explanation for why incumbent firms in an industry may support the use of pattern bargaining in labor negotiations.

    Original languageEnglish (US)
    Pages (from-to)239-255
    Number of pages17
    JournalInternational Economic Review
    Volume45
    Issue number1
    DOIs
    StatePublished - Feb 2004

    ASJC Scopus subject areas

    • Economics and Econometrics

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