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The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations

Author

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  • Manfred Königstein

    (Universität Erfurt - Universität Erfurt, IZA - Institute for the study of labor - Institute for the Study of Labor - IZA)

  • Marie Claire Villeval

    () (IZA - Institute for the study of labor - Institute for the Study of Labor - IZA, GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract

The 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 multiissue 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.

Suggested Citation

  • Manfred Königstein & Marie Claire Villeval, 2005. "The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations," Post-Print halshs-00175021, HAL.
  • Handle: RePEc:hal:journl:halshs-00175021
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00175021
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    References listed on IDEAS

    as
    1. Weinberger, Catherine J., 2000. "Selective Acceptance and Inefficiency in a Two-Issue Complete Information Bargaining Game," Games and Economic Behavior, Elsevier, vol. 31(2), pages 262-293, May.
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    3. Conlin, Michael & Furusawa, Taiji, 2000. "Strategic Delegation and Delay in Negotiations over the Bargaining Agenda," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 55-73, January.
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    9. In, Younghwan & Serrano, Roberto, 2003. "Agenda restrictions in multi-issue bargaining (II): unrestricted agendas," Economics Letters, Elsevier, vol. 79(3), pages 325-331, June.
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    Cited by:

    1. Appelbaum, Elie, 2011. "Union-firm bargaining: Order of play and efficiency," Games and Economic Behavior, Elsevier, vol. 71(2), pages 235-245, March.
    2. Elie Appelbaum, 2009. "Alternating Offers Union-Firm Bargaining: Order of Play and Efficiency," Working Papers 2009_02, York University, Department of Economics.

    More about this item

    Keywords

    bargaining agenda; efficient contracts; right-to-manage; decision authority; experiments;

    JEL classification:

    • 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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