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Costs of Negotiations and the Structure of Bargaining – A Note

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Pichler, E. Costs of Negotiations and the Structure of Bargaining – A Note. Journal of Contextual Economics – Schmollers Jahrbuch, 113(1), 115-121. https://doi.org/10.3790/schm.113.1.115
Pichler, Eva "Costs of Negotiations and the Structure of Bargaining – A Note" Journal of Contextual Economics – Schmollers Jahrbuch 113.1, 1993, 115-121. https://doi.org/10.3790/schm.113.1.115
Pichler, Eva (1993): Costs of Negotiations and the Structure of Bargaining – A Note, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 113, iss. 1, 115-121, [online] https://doi.org/10.3790/schm.113.1.115

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Costs of Negotiations and the Structure of Bargaining – A Note

Pichler, Eva

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 113 (1993), Iss. 1 : pp. 115–121

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Pichler, Eva

Abstract

According to Horn and Wolinsky's model on the patterns of unionization the workers' and the firm's interests with respect to the scope of unionization are always opposed to each other. Of course, transaction costs of bargaining can establish a region in which an encompassing union is more profitable for both parties. This note demonstrates that due to externalities of negotiations the range of this possibility is much larger than the difference of expected transaction costs.