SFB 303 Discussion Paper No. A - 477
Author: Corneo, Giacomo G.
Title: The Theory of the Open Shop Trade Union Reconsidered
Abstract: In this paper a microeconomic foundation of the social custom approach
to trade union membership is provided. The reputation effect of belonging to
the union is endogenized as the outcome of a signalling game among the
workers. The signalling value of being a union member depends in equilibrium
on the union density, but the form of this relationship may turn to differ
from what is usually assumed in the literature. Conditions for the existence
of a critical mass that is necessary for union viability are determined and
given a precise interpretation in terms of status-seeking behaviour.
Finally, implications for optimal unionism are derived.
Keywords: trade union membership, social custom models, status seeking
JEL-Classification-Number: J50, J51
Creation-Date: March 1995
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