Strikes and Holdouts in Wage Bargaining: Theory and Data
We develop a private-information model of union contract negotiations in which disputes signal a firm's willingness to pay. Previous models have assumed that all labor disputes take the form of a strike. Yet a prominent feature of U.S. collective bargaining is the holdout: negotiations often continue without a strike after the contract has expired. Production continues with workers paid according to the expired contract. We analyze the union's decision to strike or hold out and highlight its importance to strike activity. Strikes are more likely to occur after a drop in the real wage or a decline in unemployment.
|Date of creation:||1992|
|Date of revision:||09 Jun 1998|
|Publication status:||Published in American Economic Review, 82:1, March 1992, pages 100-121. Reprinted in Bengt Holmstrom, Paul Milgrom, and Alvin E. Roth, eds., Game Theory in the Tradition of Bob Wilson, Berkeley Electronic Press, www.bepress.com/wilson, May 2002.|
|Contact details of provider:|| Postal: Economics Department, University of Maryland, College Park, MD 20742-7211|
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin J. Mauro, 1982. "Strikes as a Result of Imperfect Information," ILR Review, Cornell University, ILR School, vol. 35(4), pages 522-538, July.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
661465000000000387, David K. Levine.
- Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 345-364.
- David Card, 1988. "Strikes and Wages: A Test of a Signalling Model," NBER Working Papers 2550, National Bureau of Economic Research, Inc.
- Holden, S., 1990. "A Bargaining Theory Of Inflation," Memorandum 13/1990, Oslo University, Department of Economics.
- Roth, Alvin E & Murnighan, J Keith & Schoumaker, Francoise, 1988. "The Deadline Effect in Bargaining: Some Experimental Evidence," American Economic Review, American Economic Association, vol. 78(4), pages 806-23, September.
- Peter Cramton, 1991.
"Dynamic Bargaining with Transaction Costs,"
Papers of Peter Cramton
91ms, University of Maryland, Department of Economics - Peter Cramton, revised 15 Jun 1998.
- Fernandez, Raquel & Glazer, Jacob, 1991.
"Striking for a Bargain between Two Completely Informed Agents,"
American Economic Review,
American Economic Association, vol. 81(1), pages 240-52, March.
- Raquel Fernandez & Jacob Glazer, 1989. "Striking for a Bargain Between Two Completely Informed Agents," NBER Working Papers 3108, National Bureau of Economic Research, Inc.
- Binmore, K. & Osborne, M.J. & Rubinstein, A., 1989.
"Noncooperative Models Of Bargaining,"
89-26, Michigan - Center for Research on Economic & Social Theory.
- Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225 Elsevier.
- Brian P. McCall, 1990. "Interest Arbitration and the Incentive to Bargain," Journal of Conflict Resolution, Peace Science Society (International), vol. 34(1), pages 151-167, March.
- Ashenfelter, Orley & Johnson, George E, 1969. "Bargaining Theory, Trade Unions, and Industrial Strike Activity," American Economic Review, American Economic Association, vol. 59(1), pages 35-49, March.
- Bruce E. Kaufman, 1981. "Bargaining Theory, Inflation, and Cyclical Strike Activity in Manufacturing," ILR Review, Cornell University, ILR School, vol. 34(3), pages 333-355, April.
- Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
- Peter C. Cramton, 1992.
"Strategic Delay in Bargaining with Two-Sided Uncertainty,"
Review of Economic Studies,
Oxford University Press, vol. 59(1), pages 205-225.
- Peter Cramton, 1992. "Strategic Delay in Bargaining with Two-Sided Uncertainty," Papers of Peter Cramton 92res, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
- 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.
- Herbert R. Northrup, 1971. "The Railway Labor Act: A Critical Reappraisal," ILR Review, Cornell University, ILR School, vol. 25(1), pages 3-31, October.
- Harrison, Alan & Stewart, Mark, 1989. "Cyclical Fluctuations in Strike Durations," American Economic Review, American Economic Association, vol. 79(4), pages 827-41, September.
- Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-37, May.
- Gunderson, Morley & Kervin, John & Reid, Frank, 1986. "Logit Estimates of Strike Incidence from Canadian Contract Data," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 257-76, April.
- Oliver Hart, 1989. "Bargaining and Strikes," The Quarterly Journal of Economics, Oxford University Press, vol. 104(1), pages 25-43.
- McConnell, Sheena, 1989. "Strikes, Wages, and Private Information," American Economic Review, American Economic Association, vol. 79(4), pages 801-15, September.
When requesting a correction, please mention this item's handle: RePEc:pcc:pccumd:92aer. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Cramton)
If references are entirely missing, you can add them using this form.