Multiunion Bargaining: Tariff Plurality and Tariff Competition

We study (efficient) sequential bargaining between two unions and a single firm. If unions are perfectly substitutable (tariff competition), then there is a first-mover advantage and the second union is foreclosed. If unions are perfectly complementary (tariff plurality), then there is a second-mover advantage, so that the first union's wage bill is smaller than the second union's. If unions represent worker groups each producing a differentiated good, then overemployment (underemployment) occurs when goods are substitutable (complementary). Unions merge when workers are substitutable but stay separate when they are complementary, so that the inefficiencies associated with craft unionism persist.