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

  • Manfred Königstein

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

  • Marie-Claire Villeval

    (IZA - Institute for the study of labor - IZA - Institute for the Study of Labor, GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)

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.

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Paper provided by HAL in its series Post-Print with number halshs-00175021.

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Date of creation: Sep 2005
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Handle: RePEc:hal:journl:halshs-00175021
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  8. Curhan, Jared R. & Elfenbein, Hillary Anger & Xu, Heng, 2005. "What do People Value when they Negotiate? Mapping the Domain of Subjective Value in Negotiation," Working papers 18234, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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  11. Inderst, Roman, 1998. "Multi-Issue Bargaining with Endogenous Agenda," Sonderforschungsbereich 504 Publications 98-35, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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  15. John M. Abowd & Francis Kramarz, 1992. "A Test of Negotiation and Incentive Compensation Models Using Longitudinal French Enterprise Data," NBER Working Papers 4044, National Bureau of Economic Research, Inc.
  16. Sen, Amartya, 1988. "Freedom of choice : Concept and content," European Economic Review, Elsevier, vol. 32(2-3), pages 269-294, March.
  17. Currie, J., 1990. "Employment Determination In A Unionized Public Sector Labor Market: The Case Of Ontario'S School Teachers," Papers 20, California Los Angeles - Applied Econometrics.
  18. 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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