Individual and Collective Wage Bargaining

Anat Levy and Lloyd Shapley

International Economic Review, 1997, vol. 38, issue 4, 969-91

Abstract: Wage negotiation is modeled as an oceanic game. The employer and unions (if any) are atomic players, interacting with an 'ocean' of infinitesimal individual, unorganized workers. All workers are equally productive inside the firm but may differ in their outside opportunities. The 'worth' of a coalition is its achievable surplus, and the Shapley value of the c-f game thereby defined provides a plausible, equitable wage settlement. Several different levels of unionization are investigated. It is noteworthy that this approach does not introduce specific bargaining procedures; instead (like the core) it builds on cooperative possibilities present in the economic situation itself. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1997
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Related works:
Working Paper: Individual and Collective Wage Bargaining (1992)
Working Paper: Individual and Collective Wage Bargaining (1990)
Working Paper: Individual and Collective Wage Bargaining (1986)
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