Endogenous timing under price competition and unions

We investigate the endogenous order of moves in a duopoly under price competition with a unionized labor market. We show that the established results are not robust to the presence of unions.We find that when product substitutability is sufficiently high and unions are sufficiently wage-interested the sub-perfect equilibrium is the simultaneous choice of prices by firms (in sharp contrast to the received literature) and, moreover, the well-known result that in price games there is always a preference for being a follower no longer holds true under unionization.