When do firms prefer either monopolistic unions or an efficient bargaining?

In this paper we investigate the effects of two popular labour market institutions – namely, Monopoly Union and Efficient Bargaining – on market and welfare outcomes in a Cournot duopoly. We show that depending on values of the union power, the Monopoly Union institution may be preferred by both firms and unions, in particular when the value of the union power is included between a “medium-high” range, while if Efficient Bargaining and Right-to-Manage arrangements are compared no agreement may occur. Therefore the detection of a set of levels of bargaining for which there exists an agreement on the Monopoly Union institution may be interesting also for policy purposes.