Dr. Pedro Gonzaga
Faculdade de Economia da Universidade de Porto

Sumário (Abstract): Competition authorities all over the world allocate substantial resources to detect and prosecute cartels who cooperatively fix prices, limit production or divide markets. Nevertheless, there seems to be little investigation of collusive practices in the labor market, which is suggested by empirical evidence to be relevant as well. In this seminar we will discuss the concept of collusion in the labor market and how it may take place either in the supply side of the market, in the form of labor unions (a topic that has already been widely addressed by economists); or in the demand side of the market, in the form of collusion by employers. Since there is a clear gap in the literature on this last subject, we will present our recent research on the incentive of employers to collude. In particular we will discuss the strong connection between collusion in the labor market and collusion in the final good market, we will describe how the strategic interaction between the firms of the cartel affects the markets and predict their negative impact on the worker and consumer’s welfare.