Efficiency and Behavioral Considerations in Labor Negotiations
نویسندگان
چکیده
Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We fnd that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in singleissue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency. JEL classification: C72, C78, C91, D03, J51, J52 PsycINFO Classification Categories and Codes: 3020, 3040
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The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations
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