European collective bargaining systems have the reputation of imposing rigidity on the labor market, which leads to high unemployment, in particular when compared to the USA system. Portugal is one of the OECD economies with highest wage °exibility and lowest unemployment rate, despite having typically European labor market institutions |collective bargaining sets wages for unionized as well as...

Buyers’ Alliances for Bargaining Power by Suchan Chae and Paul Heidhues We provide a novel explanation as to why forming an alliance of buyers (or sellers) across separate markets can be advantageous when input prices are determined by bargaining. Our explanation helps to understand the prevalence of buyer cooperatives among small and medium sized firms.

In this paper, we propose a refinement of the subgame perfect equilibrium concept for infinitely repeated games, selection-consistent perfect equilibrium. This concept reflects the idea that players may not expect future bargaining power to be correlated with bygone actions. The equilibrium payoff set is generated by equilibria with a simple recursive structure. When discounting tends to zero, ...

The effects of changes in nominal bargaining power, the proposal selection rule and discounting in legislative bargaining outcomes are investigated. The comparative static predictions of the Baron-Ferejohn (1989) model better organize behavior than does Gamson’s Law (1961). However, proposer power is not nearly as strong as predicted under Baron-Ferejohn as coalition partners refuse to take the...

The Federal Communications Commission (FCC) initiated a proceeding in 2002 to examine whether and to what extent cable operators should be limited in the number of subscribers they can serve. This paper reports on the performance of experimental (laboratory) markets designed to be similar in structure and practice to the market where cable operators negotiate affiliate fees with various program...

This paper investigates how the supplier’s bargaining power affects trade credit supply. We use a novel firm-level database of Chinese firms with unique information on the amount, terms, and payment history of trade credit extended to customers and detailed information on product market structure and clients-supplier relationships. We document that suppliers with weak bargaining power towards t...

This article intends to apply the Nash Bargaining solution to wage setting in a vertically differentiated oligopoly and to study its welfare effects. The market outcome crucially depends on the bargaining power attributed to the agents. I show that the resulting wage bargaining structure is likely to lead to another source of distortion that adds to the classical one derived by oligopoly pricin...

Many real-life contract agreements actually involve negotiations in which both parties have some bargaining power. However, standard contract theory assumes that the principal holds all of the bargaining power. The literature has typically modeled that with a one-shot game in which the principal makes a take-it-or-leave-it offer to the agent. Then, the agent is only able to accept or reject the...

This paper proposes a bargaining-based jammer power allocation scheme for multi-source multi-destination wireless network in the presence of a friendly jammer and a malicious node which eavesdrops erratically. We formulate the erratic behavior of the eavesdropper as a novel model where the eavesdropper wiretaps the message of the legitimate sources with a certain probability in a time slot. Mor...

This paper studies a decentralized, dynamic matching and bargaining market: buyers and sellers are matched into pairs. Traders exit the market at a constant rate, inducing search costs (frictions). All price o¤ers are made by sellers. Despite the fact that sellers have all the bargaining power we show that they set competitive prices in the limit when frictions become small. Previous literature...