The purpose of this paper is to analyze bargaining between a firm and a finite set of workers. In particular employment choice and the payoffs in equilibrium are studied. In the model, the firm first selects the workers it wants to hire. The selected workers then decide whether they want to proceed in bargaining with the firm. Finally, bargaining takes place. In contrast to Stole & Zweibel (1996), we assume that contracts are binding. The payoff for a worker is given by a share of the contribution to production, treating all other workers as employed, in addition to the worker's outside option.
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Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number
1998:1.
Length: 25 pages Date of creation: 14 Jan 1998 Date of revision: Publication status: Published in Games and Economic Behavior, 2003, pages 296-311. Handle: RePEc:hhs:uunewp:1998_001
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Find related papers by JEL classification: C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory D21 - Microeconomics - - Production and Organizations - - - Firm Behavior J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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