Does International Outsourcing Really Lower Workers’ Income? We analyze the impact of international outsourcing on income, if the domestic labor market is imperfect. We distinguish in our analysis between the case where the parties negotiate over the wage only and where they negotiate over both wage and profit share. We find that in the first case outsourcing will reduce (increase) workers’ inc...

Our main objective is to investigate the influence of the bargaining power within a chain on its industry. As a building block, we first discuss the implications of bargaining within a single chain by considering an asymmetric Nash bargaining on the wholesale price (BW). We show that both Manufacturer Stackelberg (MS) and VI strategies are special cases of the BW contract. We then develop the N...

A class of bargaining games in which agents bargain over prices and maximum trading constraints is considered: It is proved that all the Stationary Subgame Perfect Equilibria of these games implement Walrasian allocations as the bargaining frictions vanish. The result holds for any number of agents and is robust to different specifications of the bargaining process. © 2011 Published by Elsevier...

This paper tests predictions from bargaining theory about how private information, patience, and bargaining disutility affect the division of surplus between negotiating parties. We do so using the responses to a novel survey of 1,500 new car buyers in California that asks buyers detailed questions about their bargaining behavior, their search for information, and their individual characteristi...

This paper reviews recent work on macroeconomic management with varying organization of wage/price bargaining and degrees of credible monetary conservatism. The emerging literature synthesizes and extends theory and empirics on central bank independence (CBI) and coordinated wage/price bargaining (CWB), arguing that the degrees of CBI and CWB interact with each other and with other political-ec...

Since the passage of the National Labor Relations Act in 1935, collective bargaining has been the primary means by which U.S. workers can collectively negotiate terms and conditions of employment with their employer. Currently, more than 100,000 contracts are in effect, covering approximately 9 million workers and their employers in the private sector. (An additional 8 million workers are cover...

The paper analyses the links between a binding minimum wage and union bargaining. A dual labour market model is developed where the rst sector outcome is characterised by bargaining between unions and rms, while in the second sector rms have to pay a statutory minimum wage. It is shown that a minimum wage increase has negative employment e ects only if the bargaining outcome is described by the...

We develop observable restrictions of well-known theories of bargaining over money. We suppose that we observe a finite data set of bargaining outcomes, including data on allocations and disagreement points, but no information on utility functions. We ask when a given theory could generate the data. We show that if the disagreement point is fixed and symmetric, the Nash, utilitarian, and egalit...

Building on Genicot and Ray (2006) we develop a model on non-cooperative bargaining that combines the two main approaches in the literature of contracting with externalities: the o¤er game (in which the principal makes simultaneous o¤ers to the agents) and the bidding game (in which the agents make simultaneous o¤ers to the principal). Allowing for agent coordination, we show that the outcome o...

In this research, we examine the influence of beliefs about fairness on bargaining behavior. Using a repeated ultimatum game, we examine bargaining contexts in Japan and the United States in which buyers’ or sellers’ fair beliefs are either in alignment with or in conflict with their own self-interest. We suggest that understanding the relationship between fair beliefs and self-interest is cent...