Bargaining over a Menu of Wage Contracts
AbstractThe authors investigate an infinite horizon bargaining problem in which a firm and a worker bargain over two dimensions: quality and wage. The worker has private information about his type. Only the uninformed firm makes an offer and it can offer a menu of quality-age contracts instead of a single one. They show that for all discount factors, the unique sequential equilibrium outcome is separating without delay; the firm separates the types of worker with a menu of contracts in the first period. The authors result shows that in multidimensional bargaining, the 'Coase Conjecture' holds in the sense that the game ends in the first period. But it fails in the sense that the uninformed party can preserve the entire bargaining power. Copyright 1998 by The Review of Economic Studies Limited.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 65 (1998)
Issue (Month): 2 (April)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
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- John Asker & Estelle Cantillon, 2010.
"Procurement when price and quality matter,"
RAND Journal of Economics,
RAND Corporation, vol. 41(1), pages 1-34.
- John Asker & Estelle Cantillon, 2006. "Procurement When Price and Quality Matter," Working Papers 06-24, New York University, Leonard N. Stern School of Business, Department of Economics.
- Asker, John & Cantillon, Estelle, 2007. "Procurement when Price and Quality Matter," CEPR Discussion Papers 6082, C.E.P.R. Discussion Papers.
- John Asker & Estelle Cantillon, 2010. "Procurement when Price and Quality Matter," ULB Institutional Repository 2013/99378, ULB -- Universite Libre de Bruxelles.
- Asker, John & Cantillon, Estelle, 2005. "Optimal Procurement When Both Price and Quality Matter," CEPR Discussion Papers 5276, C.E.P.R. Discussion Papers.
- Mikhail Drugov, 2006. "Information and Delay in an Agency Model," Economics Series Working Papers 298, University of Oxford, Department of Economics.
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