Does the union help in winning the hiring race on the labour market?

Summary In the context of a race to hire in the labor market, we measure the influence of the union's bargaining power on the outcome of the competition between two duo-firms. A theoretical model identifies the influence of efficient bargaining on the maximum bid of each firm. The properties of this model are tested by the two-step Heckman procedure. Union power reduces a firm's probability of winning the auction, but only above a certain level.