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Intra Firm Bargaining and Shapley Values

Björn Brügemann (), Pieter Gautier () and Guido Menzio ()
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Björn Brügemann: Department of Economics, Vrije Universiteit Amsterdam

Authors registered in the RePEc Author Service: Bjoern A. Bruegemann ()

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We study two wage bargaining games between a Â…rm and multiple workers. We revisit the bargaining game proposed by Stole and Zwiebel (1996a). 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 payffs are different from those reported in Stole and Zwiebel (1996a) 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 Örm bargaining; Shapley value (search for similar items in EconPapers)
JEL-codes: D21 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2018-01-31, Revised 2018-01-31
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Related works:
Working Paper: Intra Firm Bargaining and Shapley Values (2016) Downloads
Working Paper: Intra Firm Bargaining and Shapley Values (2015) Downloads
Working Paper: Intra Firm Bargaining and Shapley Values (2015) Downloads
Working Paper: Intra Firm Bargaining and Shapley Values (2015) Downloads
Working Paper: Intra Firm Bargaining and Shapley Values (2015) Downloads
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