Bargaining and the Joint-Cost Theory of Strikes: An Experimental Study
This article reports on an experiment that is designed to test predictions about the frequency of disagreement (strikes) in games with complete information. An empirical test of the "joint-cost" theory, which relates strike activity to the marginal cost of striking, is based on a set of "shrinking pie" games in which subjects bargain in consecutive periods over how to divide a sum of money. Strike activity is a frequent occurrence in these games and, moreover, does not disappear over time. The joint-cost theory receive some support, indicating that further tests may be useful. Copyright 1990 by University of Chicago Press.