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Holdout threats of the union during wage bargaining

Listed author(s):
  • Ahmet Ozkardas

    ()

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

  • Agnieszka Rusinowska

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Registered author(s):

    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.

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    File URL: https://halshs.archives-ouvertes.fr/halshs-01112402/document
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    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-01112402.

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    Date of creation: Sep 2014
    Publication status: Published in Documents de travail du Centre d'Economie de la Sorbonne 2014.72 - ISSN : 1955-611X. 2014
    Handle: RePEc:hal:cesptp:halshs-01112402
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01112402
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    1. Moene, Karl Ove & Wallerstein, Michael, 1997. "Pay Inequality," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 403-430, July.
    2. Ahmet Ozkardas & Agnieszka Rusinowska, 2014. "Wage bargaining with discount rates varying in time under different strike decisions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00975533, HAL.
    3. Cramton, Peter C & Tracy, Joseph S, 1994. "The Determinants of U.S. Labor Disputes," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 180-209, April.
    4. Fernandez, Raquel & Glazer, Jacob, 1991. "Striking for a Bargain between Two Completely Informed Agents," American Economic Review, American Economic Association, vol. 81(1), pages 240-252, March.
    5. Cramton, Peter C & Tracy, Joseph S, 1992. "Strikes and Holdouts in Wage Bargaining: Theory and Data," American Economic Review, American Economic Association, vol. 82(1), pages 100-121, March.
    6. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
    7. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 87-130, Supplemen.
    8. Oliver Hart, 1989. "Bargaining and Strikes," The Quarterly Journal of Economics, Oxford University Press, vol. 104(1), pages 25-43.
    9. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
    10. Harold Houba & Quan Wen, 2008. "On striking for a bargain between two completely informed agents," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(3), pages 509-519, December.
    11. Moene, Karl O, 1988. "Unions' Threats and Wage Determination," Economic Journal, Royal Economic Society, vol. 98(391), pages 471-483, June.
    12. Haller, Hans & Holden, Steinar, 1990. "A letter to the editor on wage bargaining," Journal of Economic Theory, Elsevier, vol. 52(1), pages 232-236, October.
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