Implementing endogenous inside options in Nash wage bargaining models

Abstract

The Rubinstein alternating-offers game shows that the threat point in Nash wage bargaining models should be the inside, instead of the outside, option. We provide a new way to implement inside options by explicitly modeling a utilitarian union’s strike payoff. The solution to the dynamic bargaining system resulting from the endogeneity of the inside option… (More)
DOI: 10.1016/j.mathsocsci.2008.09.003

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