Wage Bargaining and Employment Revisited: Separability and Efficiency in Collective Bargaining

Arbeitspapier

We analyse the two-dimensional Nash bargaining solution (NBS) deploying a standard labour market negotiations model (McDonald and Solow, 1981). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems such that the two solutions together replicate the solution of the two-dimensional problem, if the NBS is applied. The axiom of Independence of Irrelevant Alternatives turns out to be crucial for decomposability. Our result has significant implications for actual negotiations, as it allows for the decomposition of a multi-dimensional bargaining problem into simpler problems—and thus helps to facilitate real-world negotiations.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 8422

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining ; Labor Contracts ; Bargaining Theory; Matching Theory
• Thema: labour market negotiations ; efficient bargains ; Nash bargaining solution ; sequential bargaining ; restricted bargaining games

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Haake, Claus-Jochen ; Upmann, Thorsten ; Duman, Papatya
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and Ifo Institute (CESifo)
• (wo): Munich
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/223494
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ