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Union Wage Bargaining and the Incentive to Innovate

URN to cite this document:
Lingens, Jörg
Date of publication of this fulltext: 05 Aug 2009 13:22


We analyse the impact of union wage bargaining on the firm’s incentive to invest into research. In a heterogenous Cournot duopoly, each firm invests resources into a patent race similar to Reinganum (1983) and bargains the wage with a labour union. Union wage bargaining affects the incentive to innovate through its effect on the profit situation of the firm. Besides the hold-up and the strategic ...


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