[en] If a profit‐maximizing firm credibly commits to an employment‐enhancing corporate social responsibility objective in negotiations with a trade union, the union can reduce its wage demands. Lower wages, ceteris paribus, raise profits, while the increase in employment enhances the payoff of a wage‐setting trade union. Therefore, both the firm and the trade union can be better off in the presence of a collectively bargained corporate social responsibility objective than in its absence. Accordingly, establishing a corporate social responsibility objective can give rise to a Pareto improvement and mitigate the inefficiency resulting from collective wage negotiations.
Disciplines :
Microéconomie
Auteur, co-auteur :
Goerke, Laszlo ; Trier University IAAEU, IZA, CESifo, GLO
PAULUS, Nora ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Finance (DF)
Co-auteurs externes :
yes
Langue du document :
Anglais
Titre :
Collective bargaining about corporate social responsibility
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