How Asymmetrically Increasing Joint Strike Costs Need Not Lead to Fewer Strikes

The joint costs model states that increasing union and firm strike costs lead to fewer strikes. This paper shows that strike incidence need not decrease when joint strike costs increase. The innovation is to raise union and firm joint strike costs in an asymmetric way. The results indicate that incr...

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Bibliographic Details
Published in:Atlantic economic journal 2017-06, Vol.45 (2), p.149-161
Main Authors: Pantsios, Archontis L., Polachek, Solomon W.
Format: Article
Language:English
Subjects:
Ambiguity
Analysis
Costs
Economic aspects
Economics
Economics and Finance
Innovations
International Economics
Macroeconomics/Monetary Economics//Financial Economics
Microeconomics
Public Finance
Strikes
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Summary:The joint costs model states that increasing union and firm strike costs lead to fewer strikes. This paper shows that strike incidence need not decrease when joint strike costs increase. The innovation is to raise union and firm joint strike costs in an asymmetric way. The results indicate that increasing either party’s strike costs can have ambiguous effects on strike incidence. This ambiguity explains why higher strike costs need not always lead to fewer strikes, and thus accounts for the mixed success observed in studies that empirically test the joint costs model with strike incidence data.
ISSN:0197-4254
1573-9678
DOI:10.1007/s11293-017-9539-5