On equilibrium payoffs in wage bargaining with discount rates varying in time

Ahmet Ozkardas () and Agnieszka Rusinowska
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Ahmet Ozkardas: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: We provide an equilibrium analysis of a wage bargaining model between a union and a firm in which the union must choose between strike and holdout in case of a disagreement. While in the literature it is assumed that the parties of wage bargaining have constant discount factors, in our model preferences of the union and the firm are expressed by sequences of discount rates varying in time. First, we describe necessary conditions under arbitrary sequences of discount rates for the supremum of the union's payoffs and the infimum of the firm's payoffs under subgame perfect equilibrium in all periods when the given party makes an offer. Then, we determine the equilibrium payoffs for particular cases of sequences of discount rates varying in time. Besides deriving the exact bounds of equilibrium payoffs, we also characterize the equilibrium strategy profiles that support these extreme payoffs.

Keywords: Union; firm bargaining; varying discount rates; subgame perfect equilibrium; equilibrium payoffs; Négociation entre un syndicat et une firme; taux d'escompte variable; équilibre en sous-jeu parfait; paiements sur un équilibre (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-gth and nep-mic
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00971403v1
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Citations: View citations in EconPapers (4)

Published in 2014

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Related works:
Journal Article: On equilibrium payoffs in wage bargaining with discount rates varying in time (2015)
Working Paper: On equilibrium payoffs in wage bargaining with discount rates varying in time (2015)
Working Paper: On equilibrium payoffs in wage bargaining with discount rates varying in time (2015)
Working Paper: On equilibrium payoffs in wage bargaining with discount rates varying in time (2015)
Working Paper: On equilibrium payoffs in wage bargaining with discount rates varying in time (2014)
Working Paper: On equilibrium payoffs in wage bargaining with discount rates varying in time (2014)
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