That’s what I figured the logic was, and it seems misguided to me. I’m going to explain what’s in my head because it’s been driving me bananas. If there’s someone with empirical data showing one way or the other, I’d appreciate a recommendation. This is what I remember from my Marxian labor economics class in college, so it doesn’t come from practice as an economist or anything like that.
It’s not like PepsiCo’s money is sitting idle, they have it invested all over the place. They can’t possibly lose money from a boycott in any meaningful amount, the worst they can do is match the market. What does happen is the margin that the workers can fight over decreases over time, which undermines the workers’ bargaining position. Stable demand with a supply shortage, on the other hand, increases the workers bargaining position by increasing the marginal cost of not supplying enough units. It might even make it more likely that consumers would buy a substitute, which would deepen the cost over the long run. This way instead seems like it softens the burden for the firm.
That’s what I figured the logic was, and it seems misguided to me. I’m going to explain what’s in my head because it’s been driving me bananas. If there’s someone with empirical data showing one way or the other, I’d appreciate a recommendation. This is what I remember from my Marxian labor economics class in college, so it doesn’t come from practice as an economist or anything like that.
It’s not like PepsiCo’s money is sitting idle, they have it invested all over the place. They can’t possibly lose money from a boycott in any meaningful amount, the worst they can do is match the market. What does happen is the margin that the workers can fight over decreases over time, which undermines the workers’ bargaining position. Stable demand with a supply shortage, on the other hand, increases the workers bargaining position by increasing the marginal cost of not supplying enough units. It might even make it more likely that consumers would buy a substitute, which would deepen the cost over the long run. This way instead seems like it softens the burden for the firm.