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THE RATIONALLY SHRINKING UNION
Author(s) -
Nalebuff Barry,
Sansing Richard
Publication year - 1996
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.1996.tb00120.x
Subject(s) - economics , monopoly , voting , wage , democracy , path (computing) , resizing , function (biology) , labour economics , majority rule , microeconomics , econometrics , mathematical economics , european union , political science , economic policy , computer science , law , programming language , evolutionary biology , politics , biology
We analyze a voting model in which a democratic monopoly labor union rationally shrinks towards zero over time. In our model, preferences are not single‐peaked so that this shrinkage may occur in spite of objections by the median voter. We characterize the wage‐employment path as a function of the time horizon and the discount rate. We show that the employment path is independent both of the labor demand curve and of the workers’utility functions.