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The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations

Manfred Königstein () and Marie Claire Villeval ()
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Manfred Königstein: University of Erfurt

No 1762, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The labor economics literature has shown that the "efficient bargaining" model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient "right-to-manage" model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multiissue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining.

Keywords: bargaining agenda; efficient contracts; right-to-manage; decision authority; experiments (search for similar items in EconPapers)
JEL-codes: C72 C78 C91 J51 J53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-evo and nep-exp
Date: 2005-09
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Working Paper: The Choice of the Agenda in Labor Negotiations: efficiency and behavioral considerations (2005) Downloads
Working Paper: The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations (2005) Downloads
Working Paper: The Choice of the Agenda in Labor Negotiations: efficiency and behavioral considerations (2005) Downloads
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