| Asymmetric Information | The fact that the firm knows more about the firm's financial status than the union or the workers.
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| Business Unionism | A union movement that has as its main goal to improve the wages and working conditions of its members mainly through collective bargaining, rather than to advance a particular social agenda through legislation and political action.
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| Certification Elections | The election where workers vote on whether a particular union is to represent them in collective bargaining.
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| Contract Curve | The curve showing all points where the union's indifference curves are tangent to the firm's isoprofit curve, so that the wage-employment combinations are Pareto-optimal.
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| Conventional Arbitration | A means of resolving a collective bargaining dispute where: (1) both parties in the dispute present their offers to an objective arbitrator; (2) the arbitrator compares the two offers, and (3) comes up with a solution which both sides are legally bound to accept.
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| Decertification Election | The election where workers vote on whether to decertify a union from representing them in collective bargaining.
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| Efficient Contracts | The contract which the union and firm mutually agree to wage-employment combination on the contract curve.
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| Exit-Voice Hypothesis | The hypothesis that the only way that nonunion workers can register their dissatisfaction is by quitting the firm (i.e., exit); nonunion workers leave the firm because workers do not have an established mechanism for informing employers of grievances in the absence of unions (i.e., a voice). Unions, therefore, can improve efficiency by reducing the quit rate.
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| Featherbedding Practices | Work rules negotiated by a union that purposely stipulate more than the "necessary amount" of labor be used to perform a job. An extreme example of featherbedding is a worker who is added to the payroll but never even shows up for work.
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| Final-Offer Arbitration | A means of resolving a collective bargaining dispute where both parties in the dispute present their offers to an objective arbitrator who only chooses from one of the two offers and which both sides are bound to accept.
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| Hicks Paradox | The irrationality of strikes when the parties have reasonably good information about the costs and the likely outcome of the strike. The paradox occurs because the firm and the union can agree to the strike outcome in advance, save the cost associated with the strike, share the savings between them, and both parties will be better off.
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| Monopoly Unionism | The model of union behavior that the union has an effective monopoly on the sales of labor to the firm. Therefore, the union sets that price of its product (that is, the union sets the wage) and firms then decide how many workers to hire.
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| Pareto-Optimality | An labor market outcome is Pareto optimal if there is no alternative wage-employment combination that makes at least one of the parties better off, without making the other party worse off.
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| Right-to-Work Laws | The laws which prohibit unions from requiring that workers become union members as a condition of employment in unionized firms.
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| Spillover Effects | The union effects on the nonunion sector which explains that as workers lose their jobs in union firms, the supply of workers in the nonunion sector increases, and the competitive wage falls.
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| Strongly-Efficient Contracts | The wage-employment decision where the unionized firm hire the competitive level of employment. It arise when the contract curve is vertical.
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| Threat Effects | The influence of unions on the wage-setting in the nonunion sector. It implies that unions have a positive impact on nonunion wages because profit-maximizing employers have an incentive to keep the union out, and might be willing to share some of the excess rents in the hope that the workers will not unionize.
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| Unfair Labor Practices | A set of defining legislation which requires that employers bargain "in good faith" with unions and that employers do not interfere with the worker's right to organize. Unfair labor practices specified by the Wagner Act include the firing of workers involved in union activities and discriminating against workers who support the union.
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| Union Resistance Curve | A curve showing the combination between the union demanded wage and duration of a strike which occurs because of asymmetric information.
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| Union Wage Gain | The percentage wage increase if a randomly-chosen worker in the economy were to join a union.
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| Union Wage Gap | The percentage wage differential between workers in union firms and workers in nonunion firms.
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| Yellow-Dog Contract | A contract that stipulates as a condition of employment that the worker cannot join a union.
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