Collective Bargaining and the Division of the Value of the Enterprise

Author
Keywords
Abstract

The enterprise (firm) is modeled as a collection of formal and
informal contracts providing various factors of production with claims
on the income stream in consideration of assets or services supplied to
the enterprise. The strongly efficient bargaining model implies that
the division of the quasi-rents will result in dollar for dollar
exchanges of wealth between the union members and the shareholders. The
leading inefficient bargaining models do not imply such tradeoffs in
general. The model is tested by considering contract settlements during
the years 1976 to 1982 as recorded by the Bureau of National Affairs in
Collective Bargaining Negotiations and Contracts. Security price data
for the firms were merged with these bargaining unit level settlement
data. The tests provide substantial confirmation of the dollar for
dollar wealth tradeoff between union members and shareholders.

Year of Publication
1987
Number
218
Date Published
01/1987
Publication Language
eng
Citation Key
National Bureau of Economic Research Working Paper 2137, January 1987
URL
Working Papers