Inefficient equilibria in wage bargaining with discount rates varying in time

Agnieszka Rusinowska and Ahmet Ozkardas ()
Additional contact information
Ahmet Ozkardas: Turgut Ozal University

Economics Bulletin, 2015, vol. 35, issue 3, 1744-1751

Abstract: We consider a union-firm wage bargaining in which the union must choose between strike and holdout in case of disagreement, and preferences of the union and the firm are expressed by sequences of discount rates varying in time. We show that there may exist inefficient subgame perfect equilibria in the model under which the union engages in several periods of strikes prior to reaching a final agreement. For an inefficient equilibrium to exist, the status quo wage must be sufficiently low and the amounts that the firm offers for itself in the subgame perfect equilibrium under the exogenous always strike decision in every odd period before reaching an agreement must be sufficiently low.

Keywords: union - firm bargaining; varying discount rates; subgame perfect equilibrium; inefficient equilibria; strike (search for similar items in EconPapers)
JEL-codes: C7 J5 (search for similar items in EconPapers)
Date: 2015-08-21
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I3-P178.pdf (application/pdf)

Related works:
Working Paper: Inefficient equilibria in wage bargaining with discount rates varying in time (2015)
Working Paper: Inefficient equilibria in wage bargaining with discount rates varying in time (2015)
Working Paper: Inefficient equilibria in wage bargaining with discount rates varying in time (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00940

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().