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Information Sharing In Union-Firm Relationships


  • Anthony Creane
  • Carl Davidson


Large firms often negotiate wage rates with labor unions. When they do, an ex ante agreement to share information should make it more likely that they will reach an agreement and capture the gains from trade. However, if the firm refuses to share information, the union may shade down its wage demand to increase the probability of acceptance. This reduction in the wage can increase the joint surplus of the agents and increase social welfare. As a result, there are some circumstances in which bargaining with incomplete information can be better for the agents and society than bargaining with complete information. Copyright © (2008) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Anthony Creane & Carl Davidson, 2008. "Information Sharing In Union-Firm Relationships," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1331-1363, November.
  • Handle: RePEc:ier:iecrev:v:49:y:2008:i:4:p:1331-1363

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    Cited by:

    1. Fabio Antoniou & Nikos Tsakiris, 2016. "On the Informational Superiority of Quantities Over Prices in the Presence of an Externality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 227-250, September.
    2. Birger Wernerfelt, 2008. "Bargaining Before or After Communication?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(2), pages 211-229, June.
    3. Alexandre Gazaniol & Catherine Laffineur, 2015. "Does Outward Foreign Direct Investment affect domestic real wages? An investigation using French micro-data," FIW Working Paper series 155, FIW.

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