TY - JOUR
T1 - Information sharing in union-firm relationships
AU - Creane, Anthony
AU - Davidson, Carl
PY - 2008/11
Y1 - 2008/11
N2 - Large firms often negotiate wage rates with labor unions. When they do, an ex ante agreement to share information should make it more likely that they will reach an agreement and capture the gains from trade. However, if the firm refuses to share information, the union may shade down its wage demand to increase the probability of acceptance. This reduction in the wage can increase the joint surplus of the agents and increase social welfare. As a result, there are some circumstances in which bargaining with incomplete information can be better for the agents and society than bargaining with complete information.
AB - Large firms often negotiate wage rates with labor unions. When they do, an ex ante agreement to share information should make it more likely that they will reach an agreement and capture the gains from trade. However, if the firm refuses to share information, the union may shade down its wage demand to increase the probability of acceptance. This reduction in the wage can increase the joint surplus of the agents and increase social welfare. As a result, there are some circumstances in which bargaining with incomplete information can be better for the agents and society than bargaining with complete information.
UR - http://www.scopus.com/inward/record.url?scp=54249141092&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=54249141092&partnerID=8YFLogxK
U2 - 10.1111/j.1468-2354.2008.00514.x
DO - 10.1111/j.1468-2354.2008.00514.x
M3 - Article
AN - SCOPUS:54249141092
SN - 0020-6598
VL - 49
SP - 1331
EP - 1363
JO - International Economic Review
JF - International Economic Review
IS - 4
ER -