Abstract
This article examines the effect of unionization on welfare and trade policy using a model of duopolists competing in a third market. The traditional result that the presence of a union necessitates a stronger strategic trade policy to reach the optimal level of welfare hinges on the mode of competition. With Bertrand duopolists, a union can be welfare-improving; it can also lead to a weaker trade policy, or even reverse the direction of the optimal policy. Our results highlight the importance for trade policy of understanding the nature of firm behavior and the institutional features of the labor market.
Full Text 
Sign-in/Register to access full text options
Sign-in/Register to access full text options 
Published version (
Free)
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
