Union strikes as coordination games

Martin Calvete () and Marcelo Griebeler ()
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Martin Calvete: Federal University of Rio Grande do Sul
Marcelo Griebeler: Luiz de Queiroz College of Agriculture, University of São Paulo

Economics Bulletin, 2025, vol. 45, issue 3, 1475 - 1484

Abstract: This paper models strike participation as a coordination problem under incomplete information. Using a global games framework, we analyze how workers decide whether to join a strike when they are uncertain about the firm's resistance to wage demands. We introduce coercive mechanisms—particularly punishment for non-participation—as selective incentives employed by unions to overcome free-riding. The model yields a unique equilibrium characterized by a cutoff strategy and allows for comparative statics on the role of punishment, participation costs, and uncertainty. We show that while punishment increases the likelihood of a successful strike, its marginal returns are decreasing, suggesting that unions may achieve greater impact by reducing uncertainty or subsidizing participation. The results shed light on how institutional tools shape collective action in large groups and contribute to the theoretical understanding of union dynamics and labor disputes.

Keywords: Trade unions; Collective action; Global games. (search for similar items in EconPapers)
JEL-codes: C7 J5 (search for similar items in EconPapers)
Date: 2025-09-30
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