TY  - RPRT
        AU  - Dobbelaere, Sabien
AU  - Luttens, Roland Iwan
        TI  - Collective Bargaining under Non-Binding Contracts
        PY  - 2011/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5518
        UR  - https://www.iza.org/publications/dp5518
        AB  - We introduce collective bargaining in a static framework where the firm and its risk-neutral employees negotiate over wages in a non-binding contract setting. Our main result is the equivalence between the non-binding collective equilibrium wage-employment contract and the equilibrium contract under binding risk-neutral efficient bargaining. We also demonstrate that our non-cooperative equilibrium wages and profits coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.
        KW  - collective bargaining
KW  - union
KW  - firm
KW  - bargaining power
KW  - non-binding contract
        ER  -