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Title:The choice of the agenda in labor negotiations: efficiency and behavioral considerations PDF Logo
Authors:Königstein, Manfred
Villeval, Marie-Claire
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1762
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.
Subjects:bargaining agenda
efficient contracts
right-to-manage
decision authority
experiments
JEL:C72
C78
C91
J51
J53
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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