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Bargaining Power and Wage Determination: The Role of Outside Options
Author(s) -
Dalmazzo Alberto
Publication year - 1995
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.1995.tb00182.x
Subject(s) - bargaining power , workforce , wage bargaining , wage , labour economics , economics , investment (military) , microeconomics , power (physics) , political science , economic growth , physics , quantum mechanics , politics , law
The paper analyses the wage bargaining process between an entrepreneur and his workforce when delays in agreement intrinsically reduce the amount of returns to be shared It is shown that the outside options of the workforce and the entrepreneur can be a systematic determinant of their bargaining power in contrast to what the Rubinstein (1982) model predicts The basic model is extended to analyse: (i) bargaining under multiple unionism; (ii) the‐ possible relationship between bargaining and efficiency wages; and (iii) under investment in workforce training.