TY - JOUR
T1 - Pattern bargaining
AU - Marshall, Robert C.
AU - Merlo, Antonio
PY - 2004/2
Y1 - 2004/2
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=1642445346&partnerID=8YFLogxK
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U2 - 10.1111/j.1468-2354.2004.00124.x
DO - 10.1111/j.1468-2354.2004.00124.x
M3 - Article
AN - SCOPUS:1642445346
SN - 0020-6598
VL - 45
SP - 239
EP - 255
JO - International Economic Review
JF - International Economic Review
IS - 1
ER -