Beyond the Deadline: wage bargaining between war of attrition and preemption game
AbstractBeyond the deadline of the wage collective agreement, union members can decide to continue the work under the terms of the old contract while they are bargaining with the employer. This situation which is referred to as the hold out option, seems to be nowadays an important feature in labor negotiations in several countries. Nevertheless, prior wage bargaining models have neglected this behavior, focusing exclusively on strike and lock-out actions. This paper introduces a holdout option in a game of timing between a union and an employer. We derive two situations, namely the S-Game and the L-Game, which are the two sides of a hybrid game of war of attrition and preemption game. The analysis of the class of Nash equilibria and subgame perfect equilibria suggests that the holdout attitude might lead to ambiguous effects. Although it is a very stimulating theoretical concept, the holdout could easily result in bad uses or inefficient behavior. This is explained by the existence of a dynamic inconsistency between the short run and the long run players'rationality.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 199619.
Date of creation: 1996
Date of revision:
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod).
If references are entirely missing, you can add them using this form.