On equilibrium payoffs in wage bargaining with discount rates varying in time
AbstractWe provide an equilibrium analysis of a wage bargaining model between a union and a firm in which the union must choose between strike and holdout in case of a disagreement. While in the literature it is assumed that the parties of wage bargaining have constant discount factors, in our model preferences of the union and the firm are expressed by sequences of discount rates varying in time. First, we describe necessary conditions under arbitrary sequences of discount rates for the supremum of the union's payoffs and the infimum of the firm's payoffs under subgame perfect equilibrium in all periods when the given party makes an offer. Then, we determine the equilibrium payoffs for particular cases of sequences of discount rates varying in time. Besides deriving the exact bounds of equilibrium payoffs, we also characterize the equilibrium strategy profiles that support these extreme payoffs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00971403.
Date of creation: Feb 2014
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00971403
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Union; firm bargaining; varying discount rates; subgame perfect equilibrium; equilibrium payoffs;
Other versions of this item:
- Ahmet Ozkardas & Agnieszka Rusinowska, 2014. "On equilibrium payoffs in wage bargaining with discount rates varying in time," Documents de travail du Centre d'Economie de la Sorbonne 14011, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-18 (All new papers)
- NEP-GTH-2014-04-18 (Game Theory)
- NEP-MIC-2014-04-18 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Raquel Fernandez & Jacob Glazer, 1989.
"Striking for a Bargain Between Two Completely Informed Agents,"
NBER Working Papers
3108, National Bureau of Economic Research, Inc.
- Fernandez, Raquel & Glazer, Jacob, 1991. "Striking for a Bargain between Two Completely Informed Agents," American Economic Review, American Economic Association, vol. 81(1), pages 240-52, March.
- Rubinstein, Ariel, 1982.
"Perfect Equilibrium in a Bargaining Model,"
Econometric Society, vol. 50(1), pages 97-109, January.
- Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475.
- Holden Steinar, 1994. "Bargaining and Commitment in a Permanent Relationship," Games and Economic Behavior, Elsevier, vol. 7(2), pages 169-176, September.
- Haller, Hans & Holden, Steinar, 1990. "A letter to the editor on wage bargaining," Journal of Economic Theory, Elsevier, vol. 52(1), pages 232-236, October.
- Garcia Marinoso, Begona & Jelovac, Izabella & Olivella, Pau, 2011.
"External referencing and pharmaceutical price negociation,"
Economics Papers from University Paris Dauphine
123456789/5987, Paris Dauphine University.
- Begoña Garcia Mariñoso & Izabela Jelovac & Pau Olivella, 2011. "External referencing and pharmaceutical price negotiation," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 737-756, June.
- Begoña Garcia Mariñoso & Izabela Jelovac & Pau Olivella, 2011. "External referencing and pharmaceutical price negotiation," Post-Print halshs-00303682, HAL.
- Bolt, Wilko, 1995. "Striking for a Bargain between Two Completely Informed Agents: Comment," American Economic Review, American Economic Association, vol. 85(5), pages 1344-47, December.
- Harold Houba & Quan Wen, 2008. "On striking for a bargain between two completely informed agents," Economic Theory, Springer, vol. 37(3), pages 509-519, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.