UNION-OLIGOPOLY SEQUENTIAL BARGAINING - TRADE AND INDUSTRIAL-POLICIES

This paper considers the efficacy and the desirability of home governm ent tariff and subsidy policies when labour market structure and asymm etries in the firms' size matter. In a Cournot-Nash duopolistic sector , a unionized home-firm competes against a non-unionized foreign firm. The home firm-union choose wages and employment in a two-stage Nash b argaining game. The second stage corresponds to the Cournot-Nash game with the foreign firm. Firms may play in strategic substitutes or comp lements. As the home bargainers recognize that market shares are deter mined by relative marginal costs, they may use the wage stage strategi cally. Home government policy choices critically depend upon the barga ining structure and general equilibrium spillovers.