The Choice of the Agenda in Labor Negotiations: efficiency and behavioral considerations
AbstractThe labor economics literature has shown that the “efficient bargaining” model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient “right-to-manage” model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multi-issue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining.
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Date of creation: Sep 2005
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bargaining agenda; decision authority; efficient contract; experiment; right to manage;
Other versions of this item:
- Manfred Königstein & Marie-Claire Villeval, 2005. "The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations," Post-Print halshs-00175021, HAL.
- Königstein, Manfred & Villeval, Marie Claire, 2005. "The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations," IZA Discussion Papers 1762, Institute for the Study of Labor (IZA).
- Marie-Claire Villeval & Manfred Konigstein, 2005. "The Choice of the Agenda in Labor Negotiations: efficiency and behavioral considerations," Working Papers 0508, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
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