Citation

Discussion Paper Details

Please find the details for DP1912 in an easy to copy and paste format below:

Full Details | Bibliographic Reference

Full Details

Title: Union Power and Product Market Competition: Evidence from the Airline Industry

Author(s): Damien J Neven, Lars-Hendrik R�ller and Zhentang Zhang

Publication Date: June 1998

Keyword(s): Airline Industry, Efficiency, market power, rent sharing and union power

Programme Area(s): Industrial Organization

Abstract: In this paper, we specify and estimate a structural model, which links product market competition and union power. The model has a two-stage setting, in which wages are determined through bargaining between management and unions in the first stage, with a price-setting market game to follow in the second stage. Using data for eight European airlines from 1976?94, we provide evidence on price-cost margins and the measurement of market power in a model of rent sharing. In particular, we find that rent sharing reduces firms? profits more than it does consumers? surplus. As a consequence the static impact of unions is more on equity rather than efficiency.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1912

Bibliographic Reference

Neven, D, R�ller, L and Zhang, Z. 1998. 'Union Power and Product Market Competition: Evidence from the Airline Industry'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1912