TY  - JOUR
AU  - Fernandez,Raquel
AU  - Glazer,Jacob
TI  - Striking for a Bargain Between Two Completely Informed Agents
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3108
PY  - 1989
Y2  - September 1989
UR  - http://www.nber.org/papers/w3108
L1  - http://www.nber.org/papers/w3108.pdf
N1  - Author contact info:
Raquel Fernández
Department of Economics
New York University
19 West 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8908
Fax: 212/995-4186
E-Mail: raquel.fernandez@nyu.edu

Jacob Glazer
Department of Economics
Boston University
270 Bay State Road, Room 553
Boston, MA 02215
Tel: 617-353-6323
Fax: 617-353-4449
E-Mail: glazerj@bu.edu
AB  - This paper models the wage-contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union
also decides, in each period, whether or not to strike for the duration of that period. We show that there exist subgame-perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement, although both parties are completely rational and fully informed. This has implications for other inefficient phenomena such as tariff wars, debt negotiations, and wars in general. We characterize the set of equilibria, show that strikes can occur in real time, and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities.
ER  -