Contractual union-firm agreements and the theory of the firm under uncertainty

This article analyzes the consequence of introducing union-firm contractual agreements in the theory of the firm under uncertainty. Generalizing the works on the labor-managed firm, it is shown that the risk-averse firm produces more than the risk-neutral firm, or the firm operating under certainty as long as equilibrium employment is negatively related to union wages, that is, when union power over wages is higher than that over employment. © 1995.SCOPUS: ar.j