'bargaining and Strikes

  title={'bargaining and Strikes},
  author={Oliver Hart},
A recent literature has shown that asymmetric information about a firm's profitability does not by itself explain strikes of substantial length if the firm and workers can bargain very frequently without commitment. In this paper we show that substantial strikes are possible if (a) there is a small (but not insignificant) delay between offers; and (b) a strike-bound firm may experience a decline in profitability, with the probability of decline increasing with the length of the strike. A brief… CONTINUE READING