In this paper we develop a theory of union power based on the aggregation of bargaining power of individual workers with firm specific skills. Union power depends on the ease of replacement from internal and external labor markets. Unions increase the bargaining power of insiders only in states...

In this paper we model the dynamic interaction of two types of agents, experimenters and imitators, whose behavior is characterized by simple rules of thumb. The agents repeatedly play a one-shot game in which the agent's actions are strategic substitutes.