Date of Award
1988
Degree Type
Dissertation
Degree Name
Doctor of Philosophy
Abstract
When firms have private information a union may use a strike to reveal information about the firm. This thesis has asymmetrically-informed agents in a competitive industry in which union and nonunion firms may exist. This environment makes it possible to derive a wide class of predictions concerning union strike behavior. Many of the new predictions arise from the possibility of less than 100% unionization and the implied demand independence results. Also, multiple firm types may exist at any one time in an industry. This leads to a strong result concerning the joint distribution of wages and strikes within an industry, which is fundamental to the view of strikes as a mechanism for eliciting information on firm types.;Firms differ in the level of a cost parameter which can take on a high or low value. If there is perfect information (that is, all agents know the value of any particular firms's cost parameters), then there will be no strike in equilibrium. In the case of imperfect information, there was two types of equilibria: a pooling in which there will be no strikes, and a separating equilibrium in which strikes will occur. In the separating equilibrium the union makes two offers. One offer consists of a high wage and no strike. The other consists of a lower wage but after a strike of a chosen duration. The offers are designed to be incentive compatible.;Besides the wage rates and the strike length, the union also chooses the number of firms that it organizes. The union's costs of operating increases with the number of firms organized and this may result in the union choosing to organize less than 100% of the firms operating in the industry. A robust prediction is that within a competitive industry, wages rates and strike lengths are inversely related. Also within an industry, the wage rates of firms that settle at the beginning of the contract period should be above those of firms that settle after a strike. A number of comparative static results are also generated. Predictions about strike behavior over the business cycle are presented.
Recommended Citation
Stirling, Glen Alan, "Asymmetric Information And Union Strike Behavior In Competitive Industries" (1988). Digitized Theses. 1735.
https://ir.lib.uwo.ca/digitizedtheses/1735