Union Militancy, External Shocks and the Accommodation Dilemma

Hans Tson Söderström
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Hans Tson Söderström: Business and Social Research Institute

A chapter in Trade Unions, Wage Formation and Macroeconomic Stability, 1986, pp 193-209 from Palgrave Macmillan

Abstract: Abstract Stabilization policy under centralized wage setting is represented as a noncooperative game between an encompassing union and the government. The dilemma of the government is whether or not to accommodate supply disturbances when it cannot tell if they are due to an intentionally militant wage policy or unforeseen external price shocks. In a single round of wage setting, there is no government strategy which can both guarantee full employment and prevent union militancy. In a repeated game, however, there exists a conditional accommodation policy, which permits accommodation of supply shocks while inducing the union to refrain entirely from a militant wage policy.

Keywords: Real Wage; Full Employment; Repeated Game; External Shock; Stabilization Policy (search for similar items in EconPapers)
Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-08596-5_12

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DOI: 10.1007/978-1-349-08596-5_12

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