Efficiency and behavioral considerations in labor negotiations

Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperativ...

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Published inJournal of economic psychology Vol. 31; no. 4; pp. 599 - 611
Main Authors Königstein, Manfred, Villeval, Marie Claire
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.08.2010
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Economic Psychology
Subjects
Bargaining
Bargaining agenda
Bargaining agenda Efficient contracts Right-to-manage Social preferences Experiment
Biological and medical sciences
Economic behaviour
Economic psychology
Economics and Finance
Efficient contracts
Experiment
Experiments
Fundamental and applied biological sciences. Psychology
Game theory
Humanities and Social Sciences
Labor negotiations
Labour market flexibility
Microeconomics
Payoffs
Preferences
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Right-to-manage
Social interactions. Communication. Group processes
Social preferences
Social psychology
Studies
Efficient contracts
C78
D03
J52
Experiment
J51
3020
Bargaining agenda
3040
Right-to-manage
C91
C72
Social preferences
Human
Social preference
Choice
Experimental study
Social interaction
Bargaining
Behavior
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Abstract Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We find that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency.
AbstractList Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We find that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency. All rights reserved, Elsevier
Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We find that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency.
Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We fnd that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency.
Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We find that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency. [PUBLICATION ABSTRACT]
Author Villeval, Marie Claire
Königstein, Manfred
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Issue 4
Keywords Efficient contracts
C78
D03
J52
Experiment
J51
3020
Bargaining agenda
3040
Right-to-manage
C91
C72
Social preferences
Human
Social preference
Choice
Experimental study
Social interaction
Bargaining
Behavior
Language English
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Snippet Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in...
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SubjectTerms Bargaining
Bargaining agenda
Bargaining agenda Efficient contracts Right-to-manage Social preferences Experiment
Biological and medical sciences
Economic behaviour
Economic psychology
Economics and Finance
Efficient contracts
Experiment
Experiments
Fundamental and applied biological sciences. Psychology
Game theory
Humanities and Social Sciences
Labor negotiations
Labour market flexibility
Microeconomics
Payoffs
Preferences
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Right-to-manage
Social interactions. Communication. Group processes
Social preferences
Social psychology
Studies
Title Efficiency and behavioral considerations in labor negotiations
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Volume 31
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