International Oligopoly and Asymmetric Labour Market Institutions
NBER Working Paper No. 2038
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.
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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