Hostname: page-component-586b7cd67f-dsjbd Total loading time: 0 Render date: 2024-11-24T19:56:12.451Z Has data issue: false hasContentIssue false
  • English
  • Français

Efficient Bargaining and Accommodation Policies

Published online by Cambridge University Press:  17 August 2016

Henrik Jensen
Henrik Jensen*
Affiliation:
University of Aarhus
Get access

Summary

We show that accommodation policies may render efficient bargaining in the labour market unsustainable as a perfect Nash equilibrium of the infinitely repeated game. In fact, in the eyes of the labour market participants, efficient bargaining may be Pareto-dominated by the monopoly-union solution when the government places sufficiently high weight on employment targets.

Résumé

Résumé

Nous montrons que des politiques économiques accommodantes rendent irréalisable une négociation efficiente sur le marché du travail, débouchant sur un équilibre de Nash parfait pour un jeu répété indéfiniment. En fait, aux yeux des participants au marché du travail, la négotiation efficiente est dominée, au sens de Pareto, par la solution du monopole syndical lorsque le gouvernement attache un poids suffisamment important aux objectifs d'emploi.

Keywords

E61E62J51E61E62J51
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 59 , Issue 4 , 1993 , pp. 463 - 484
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1993 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Torben M. Andersen, Jan Rose Sørensen, one anonymous referee and participants of the European Economic Association's seventh annual congress, Dublin, August 1992, have provided me with beneficial comments and suggestions. Of course, I am responsible for any errors and hazy points.

References

REFERENCES

Abreu, D. [1988], On the Theory of Infinitely Repeated Games with Discounting, Econometrica, 56, pp. 383–396.Google Scholar
Alesina, A. and Tabellini, G. [1987], Rules and Discretion with Noncoordinated Monetary and Fiscal Policies, Economic Inquiry, 25, pp. 619–630.Google Scholar
Barro, R. J. and Gordon, D. B. [1983], A Positive Theory of Monetary Policy in a Natural Rate Model, Journal of Political Economy, 91, pp. 589–610.Google Scholar
Blackburn, K. and Christensen, M. [1989], Monetary Policy and Policy Credibility -Theories and Evidence, Journal of Economic Literature, 27, pp. 1–45.Google Scholar
Calmfors, L. [1982], Employment Policies, Wage Formation and Trade Union Behavior in a Small Open Economy, Scandinavian Journal of Economics, 84, pp. 345–373.Google Scholar
Calmfors, L. and Horn, H. [1985], Classical Unemployment, Accommodation Policies and the Adjustment of Real Wages, Scandinavian Journal of Economics, 87, pp. 234–261.Google Scholar
Calmfors, L. and Horn, H., [1986], Employment Policies and Centralized Wagesetting, Economica, 53, pp. 281–302.Google Scholar
Driffill, J. [1985], Macroeconomic Stabilization Policy and Trade Union Behaviour as a Repeated Game, Scandinavian Journal of Economics, 87, pp. 300–326.Google Scholar
Espinosa, M. P. and Rhee, C., [1989], Efficient Wage Bargaining as a Repeated Game, Quarterly Journal of Economics, 104, 3, pp. 565–588.Google Scholar
Friedman, J. [1971], A Noncooperative Equilibrium for Supergames, Review of Economic Studies, 38, pp. 1–12.Google Scholar
Fudenberg, D. and Maskin, E., [1986], The Folk Theorem in Repeated Games with Discounting and Incomplete Information, Econometrica, 54, pp. 533–554.Google Scholar
Hersoug, T. [1985], Workers versus Government-Who Adjusts to Whom? Scandinavian Journal of Economics, 87, pp. 270–292.Google Scholar
Kydland, F. E. and Prescott, E. C. [1977], Rules Rather than Discretion: The Inconsistency of Optimal Plans, Journal of Political Economy, 85, pp. 473–91.Google Scholar
Leontief, W. [1946], The Pure Theory of the Guaranteed Annual Wage Contract, Journal of Political Economy, 56, pp. 76–79.Google Scholar
Mcdonald, I. M. and Solow, R. M. [1981], Wage Bargaining and Employment, American Economic Review, 71, 5, pp. 896–908.Google Scholar
Nickell, S. J. and Andrews, M. [1983], Unions, Real Wages and Employment in Britain 1951-79, Oxford Economic Papers, 35, pp. 183–206.Google Scholar
Oswald, A. [1985], The Economic Theory of Trade Unions: An Introductory Survey, Scandinavian Journal of Economics, 87, 2, pp. 160–193.Google Scholar
Oswald, A. [1987], Efficient Contracts are on the Labour Demand Curve. Theory and Facts, Discussion Paper N° 284, Centre for Labour Economics, London School of Economics.Google Scholar
Persson, T. and Tabellini, G. [1990], Macroeconomic Policy Credibility and Politics, London: Hartwood Press.Google Scholar
Rotemberg, J. J. and Saloner, G. [1986], A Supergame-Theoretic Model of Price Wars duringBooms, American Economic Review, 76, pp. 390–407.Google Scholar
Roth, A. [1979], Axiomatic Models of Bargaining, Berlin: Springer-Verlag.Google Scholar
Strand, J. [1989]: Monopoly Unions Versus Efficient Bargaining. A Repeated Game Approach. European Journal of Political Economy, 5, pp. 473–486.Google Scholar