Three essays on labor economics

Essay I explores the determinants of the first mover in sequential firm-by-firm bargaining when the firms are Cournot-Nash duopolists in the output market. We conclude that the first mover will retain its wage leadership position unless an extremely severe negative or a substantial positive shock occurs, in which case the sequence of bargaining is indeterminate. Furthermore, we find that sequential bargaining may explain downward wage rigidity in unionized industries. Essay II examines the problem of wage settlement in the case of a single firm employing two types of labor. In the context of an infinite horizon, non-cooperative game, we find that the incorporation of state-contingent wages for each union diminishes the power of the unions and allows the firm to reap a greater portion of revenue. Essay III analyzes the question of sequencing of wage bargains for the same institutional structure. It is found that unions prefer to lead in the negotiation process if contingent contracts are admissible. If such contracts are not admissible, the preferred position depends on the relationship between the inputs.