Union Leaders as Experts: Wage Bargaining and Strikes with Union-Wide Ballot Requirements

Authors


  • I am grateful for comments and suggestions from three anonymous referees, Jim Albrecht, Marc Busch, Roger Lagunoff, Rod Ludema, Torsten Persson, Susan Vroman, and numerous seminar participants.

Abstract

To avoid strikes and to curb labour militancy, some governments have introduced legislation stating that union leadership as well as wage offers should be decided through union-wide ballots. This paper shows that members still have incentives to appoint militant union leaders, if these leaders have access to information critical for the members’ voting decisions. Furthermore, conflicts may arise in equilibrium even though the contract zone is never empty and there is an option to resolve any incomplete information. Ballot requirements hence preclude neither militant union bosses nor inefficient conflicts.

Ancillary