Union structure and the incentives for innovation in oligopoly

• Autores: Vicente Calabuig, Miguel González-Maestre
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 21, 2000
• Idioma: inglés
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• Resumen

  • In this paper we consider the effect of union structure on the adoption of innovation in the context of Cournot duopoly. With a market size large enough we show that the incentive to innovate is higher under a decentralized union structure (with each firm facing its own independent union) than under an industry-wide union. However, for a small market size (or, equivalently, for sufficiently drastic potential innovation) the new technology is more likely to be adopted in the presence of a centralized union. This result goes against the conventional view that unionization harms the incentive to innovate.