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Recherches Économiques de Louvain/ Louvain Economic Review (1)

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Integration of Product Markets when Labour Markets are Unionized
Jan Rose Sørensen
Journal:

Recherches Économiques de Louvain/ Louvain Economic Review / Volume 59 / Issue 4 / 1993

Published online by Cambridge University Press:

17 August 2016, pp. 485-502

Print publication:

1993
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This paper is a first attempt to analyse the consequences of establishing the internal market when taking account of labour market effects of product market integration. Our main focus is on market power, and we show that both labour unions and firms may lose market power when product markets become integrated. If this happens, it is likely that both workers and capitalists become better off. On the other hand, if the firms reestablish their market power through mergers or cooperation, capitalists gain, whereas workers lose. If neither firms nor unions lose market power, there are no effects of integration.