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Holdout threats of the union during wage bargaining

Author

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  • Ahmet Ozkardas

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Turgut Ozal University)

  • Agnieszka Rusinowska

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We investigate a wage bargaining between the union and the firm where the parties' preferences are expressed by varying discount rates and the threat of the union is to be on go-slow instead of striking. First, we describe the attitude of the union as hostile or altruuistic where a hostile union is on go-slow in every disagreement period and an altruistic union never threatens the firm and holds out in every disagreement period. Then we derive the subgame perfect equilibrium of the bargaining when the union's attitude is determined exogenously. Furthermore, we determine necessary conditions for the extreme equilibrium payoffs of both parties independently of the union's attitude and calculate the extreme payoffs for a particular case of discount rates.

Suggested Citation

  • Ahmet Ozkardas & Agnieszka Rusinowska, 2014. "Holdout threats of the union during wage bargaining," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01112402, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01112402
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01112402
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    References listed on IDEAS

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    1. Agnieszka Rusinowska & Ahmet Ozkardas, 2015. "On equilibrium payoffs in wage bargaining with discount rates varying in time," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 181-199, October.
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    More about this item

    Keywords

    varying discount rates; holdout threats; union - firm bargaining; subgame perfect equilibrium; go-slow threats; négociation entre un syndicat et une firme; taux d'escompte variable; équilibre en sous-jeu parfait; menaces de « go-slow »;
    All these keywords.

    JEL classification:

    • 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

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