wage bargaining is more conducive to innovation - particularly product innovation - than competitive pay setting. We test … the theory with workplace data for Britain and Norway. Results are consistent with the theory: local union bargaining is … positively associated with product innovations in both countries. In Norway, local union bargaining is also positively associated …

the new product using the normatively appealing Nash bargaining solution (see Nash, 1950). In our model the disagreement … payoffs endogenously depend on the contest outcome. More precisely, a bargaining advantage is given to the leading worker in …