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In a two‐country reciprocal dumping model, with one country unionised, we analyse how wage setting and firm location are influenced by trade liberalisation. We show that trade liberalisation can induce FDI, which is at odds with conventional theoretical wisdom and cannot happen in a corresponding model without unionisation. FDI is undertaken partly to win a distributional battle with unionised labour and the incentives to invest abroad can be too large seen from a welfare point of view.

We suggest a family bargaining model where human capital investment decisions are made non-cooperatively in a first stage, while day-to-day allocation of time is determined later through Nash bargaining, but with non-cooperative behaviour as the fall-back. One finding is that overinvestment in education may be even more of a problem in such a semicooperative model than in a fully non-cooperative one. Even though both the semicooperative model and the fully non-cooperative model predict overinvestment in education, policy conclusions that follow from the two models are distinctly different. JEL Classification: D13, J24Un autre coup d'oeil sur la famille qui marchande. Les auteurs suggèrent un modèle de famille qui marchande où les décisions d'investissement en capital humain sont prises de manière non-coopérative dans un premier temps, alors que l'allocation du temps au jour le jour est déterminée plus tard par un marchandage à la Nash, mais avec un comportement noncoopératif comme choix de second ordre. On découvre que le surinvestissement dans l'éducation peut être encore plus problématique dans un tel modèle de semi-coopération que dans un modèle de non coopération. Même si les deux modèles prévoient un surinvestissement dans l'éducation, les conclusions au plan de la politique publique qui découlent de ces deux modèles sont fort différentes.1 Nash bargaining models of the family (Manser and Brown 1980;McElroy and Horney 1981;Chiappori 1988;McElroy 1990) and the 'collective' approach (Chiappori 1992;Browning and Chiappori 1998) are examples of models that combine explicit recognition of the fact that the family consists of more than one decision maker with the assumption that outcomes are efficient. 2 Other examples of models that use non-cooperative game theory to depict family life include