International Journal of Industrial Organization 21 (2003) 737–758 www.elsevier.com / locate / econbase q Market competition and strike activity a b, * Ana Mauleon , Vincent J. Vannetelbosch a ´ LABORES ( URA 362 CNRS), Universite catholique de Lille, Lille, France b ´ FNRS and IRES, Universite catholique de Louvain,3 Place Montesquieu, B-1348 Louvain-la-Neuve, Belgium Received 19 February 2001; received in revised form 18 December 2001; accepted 3 July 2002 Abstract We develop a model of wage bargaining with private information in a duopoly. We investigate how product differentiation and market competition (Bertrand vs. Cournot competition) affect wages and strikes. If bargaining takes place at the industry-level, then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition. However, if bargaining takes place at the firm-level, then wages and strikes are increasing with the degree of product differentiation, and the strike activity is smaller under Bertrand than under Cournot competition.  2002 Elsevier Science B.V. All rights reserved. JEL classification: C78; L13; J31; J51; J52 Keywords: Bertrand competition; Cournot competition; Product differentiation; Wage bargaining; Strike activity 1. Introduction The empirical literature on collective bargaining disputes has established a number of regularities that a successful theory must accommodate. One of these q ´ Vincent Vannetelbosch is Chercheur Qualifie at the Fonds National de la Recherche Scientifique, Belgium. *Corresponding author. Tel.: 132-10-474-142; fax: 132-10-473-945. E-mail address: vannetelbosch@ires.ucl.ac.be (V.J. Vannetelbosch). 0167-7187 / 02 / $ – see front matter  2002 Elsevier Science B.V. All rights reserved. doi:10.1016/S0167-7187(02)00092-9