TESTS OF CARTTER'S WAGE‐PREFERENCE PATH

Abstract

Over the past decade, Allan Cartter's model of the utility maximizing union and the institutional principles upon which it is based have provided the basis for much of the neoclassical study of union behavior. The most fundamental component of Cartter's model is the union's utility function, which is defined over the wage level and the level of employment. As drawn by Cartter, this utility function expresses two specific hypotheses: (1) The elasticity of substitution between the two arguments will be small; (2) The utility function defines a wage‐preference path that is kinked at the current wage level (Cartter, 1959, p. 90–91).

Citation

Bellinger, W.K. (1987), "TESTS OF CARTTER'S WAGE‐PREFERENCE PATH", Studies in Economics and Finance, Vol. 11 No. 2, pp. 3-23. https://doi.org/10.1108/eb028676