NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

International Oligopoly and Asymmetric Labour Market Institutions

James A. Brander, Barbara J. Spencer

NBER Working Paper No. 2038
Issued in October 1986
NBER Program(s):   ITI   IFM

Asymmetries in labour relations can have important effects on imperfectively competitive rivalries between firms. Such asymmetries are particularly striking in cross-country comparisons and are therefore of greatest interest in international markets. Using a simple duopoly model, we focus on two asymmetries. First, one firm may face a noncooperative union and second, institutional factors may allow one firm to commit itself to particular labour input before its rival sets output, giving it a natural Stackelberg leadership role. We examine the trade policy incentives resulting from these labour asymmetries, focusing on profit shifting tariffs, quotas and subsidies.

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Document Object Identifier (DOI): 10.3386/w2038

Published: Brander, J. and Spencer, B. "Unionized Oligopoly and International Trade Policy," Journal of International Economics, Vol. 24, No. 314, 1988, pp. 217-238.

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