Entry deterrence in a unionized oligopoly

Shingo Ishiguro, Yoshimasa Shirai

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)


We investigate wage determination between an incumbent firm and its labour union under threat from another firm entering its product market. In equilibrium, it may be optimal for a labour union of the incumbent firm to lower its wage demand. This may make it possible for the incumbent firm to maintain a higher employment level, in that the lower wages can help the firm deter the entry of a rival firm. This will yield a higher profit for the incumbent firm and a lower utility level for the labour union compared with those in an equilibrium with no threat of entry.

Original languageEnglish
Pages (from-to)210-221
Number of pages12
JournalJapanese Economic Review
Issue number2
Publication statusPublished - 1998 Jan 1

ASJC Scopus subject areas

  • Economics and Econometrics


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