This paper suggests that a union's wage demands are not merely the outcome of maximizing the union's utility function subject to a labor-demand or minimum-profit constraint as the standard models of union behavior suggest, but tha t these wage...

This paper compares two theories of involuntary unemployment: the efficiency-wage theory and the insider-outsider theory. We indicate that one of the central problems in providing microfoundations for the existence of involuntary unemployment is to...