Bilateral monopoly is a labor market in which the supply side is a union and the demand side is a monopoly. Due to the monopoly power held by both parties, the equilibrium level of employment will be lower than that of a competitive labor market, but the equilibrium wage may be higher or lower, depending on which party negotiates better. Unions tend to prefer higher wages, while monopolists tend to prefer lower wages, but the results in the model are uncertain.
