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Learning in Sequential Wage Negotiations: Theory and Evidence

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  • Kuhn, Peter
  • Gu, Wulong

Abstract

When union-firm pairs bargain sequentially, and when unobserved components of firms' abilities to pay are subject to correlated shocks, unions that bargain later in a sequence can acquire valuable information by observing previous bargaining outcomes in their industry. The authors derive the implications of this kind of learning in an asymmetric information model of wage negotiations and argue that the most robust implication is a lower incidence of strikes among 'followers' than 'leaders' in wage negotiations. Considerable empirical support for this implication is found in a long panel of Canadian contract negotiations. Copyright 1999 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 17 (1999)
Issue (Month): 1 (January)
Pages: 109-40

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Handle: RePEc:ucp:jlabec:v:17:y:1999:i:1:p:109-40

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Cited by:
  1. Antonio Nicita & Matteo Rizzolli, 2010. "The case for the virtual strike," Portuguese Economic Journal, Springer, vol. 9(1), pages 75-75, April.
  2. Antonio Nicita & Matteo Rizzolli, 2009. "The Case for the Virtual Strike. An Appraisal of the Italian Proposal," Department of Economics University of Siena 557, Department of Economics, University of Siena.
  3. Clark, Andrew E. & Lohéac, Youenn, 2005. ""It Wasn't Me, It Was Them!" - Social Influence in Risky Behavior by Adolescents," IZA Discussion Papers 1573, Institute for the Study of Labor (IZA).
  4. Javier Pérez & A. Sánchez, 2011. "Is there a signalling role for public wages? Evidence for the euro area based on macro data," Empirical Economics, Springer, vol. 41(2), pages 421-445, October.
  5. Fabienne Tournadre & Marie-Claire Villeval, 2001. "Learning from Strike," CIRANO Working Papers 2001s-67, CIRANO.
  6. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, Elsevier.
  7. Calabuig, Vicente & Olcina, Gonzalo, 2000. "Commitment and strikes in wage bargaining," Labour Economics, Elsevier, vol. 7(3), pages 349-372, May.

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