Intra Firm Bargaining and Shapley Values

Björn Brügemann, Pieter Gautier and Guido Menzio
Authors registered in the RePEc Author Service: Bjoern A. Bruegemann

The Review of Economic Studies, 2019, vol. 86, issue 2, 564-592

Abstract: We study two wage bargaining games between a firm and multiple workers. We revisit the bargaining game proposed by Stole and Zwiebel. We show that, in the unique Subgame Perfect Equilibrium, the gains from trade captured by workers who bargain earlier with the firm are larger than those captured by workers who bargain later, as well as larger than those captured by the firm. The resulting equilibrium payoffs are different from those reported in Stole and Zwiebel as they are not the Shapley values. We propose a novel bargaining game, the Rolodex game, which follows a simple and realistic protocol. In the unique no-delay Subgame Perfect Equilibrium of this game, the payoffs to the firm and to the workers are their Shapley values.

Keywords: Intra firm bargaining; Shapley value (search for similar items in EconPapers)
JEL-codes: D21 J30 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Intra Firm Bargaining and Shapley Values (2018)
Working Paper: Intra Firm Bargaining and Shapley Values (2016)
Working Paper: Intra Firm Bargaining and Shapley Values (2015)
Working Paper: Intra Firm Bargaining and Shapley Values (2015)
Working Paper: Intra Firm Bargaining and Shapley Values (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:86:y:2019:i:2:p:564-592.

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