This paper analyzes the welfare implications of cost-reducing technology licensing when there is a unionized labor market. We show that an outside innovator optimally chooses per-unit royalty (fixed-fee) when the labor union is decentralized (centralized), and the innovator's profit is higher when the union is decentralized. While the labor union's payoff is maximized when the union is centralized, the welfare is maximized under decentralized labor union.
Sim et al. (Mon,) studied this question.