Union structure and the incentives for innovation in oligopoly
- Calabuig, Vicente
- González-Maestre, Miguel
Año de publicación: 2000
Número: 21
Tipo: Documento de Trabajo
Resumen
In this paper we consider the effect of union structure on the adoption of innovation in the context of Cournot duopoly. With a market size large enough we show that the incentive to innovate is higher under a decentralized union structure (with each firm facing its own independent union) than under an industry-wide union. However, for a small market size (or, equivalently, for sufficiently drastic potential innovation) the new technology is more likely to be adopted in the presence of a centralized union. This result goes against the conventional view that unionization harms the incentive to innovate.