COLLECTIVE BARGAINING UNDER COMPLETE INFORMATION

Abstract

In this paper, we build a complete information bargaining model of collective negotiation that can explain delays in reaching agreements. We structurally estimate the model using firm-level data for large Spanish firms. For this type of firm, the assumption of complete information seems a sensible one, and it matches the collective bargaining environment better than the one provided by private information models. The specification of the model with players having different discount factors allows us to measure their relative bargaining power, a recurrent question in the theory of bargaining. Our model replicates the data on delays at the sectoral and aggregate level. We also find that both entrepreneurs and workers have high discount factors, and no evidence that entrepreneurs have greater bargaining power, as usually assumed.

Citation

Diaz-Moreno, C. and Galdon-Sanchez, J.E. (2004), "COLLECTIVE BARGAINING UNDER COMPLETE INFORMATION", Polachek, S.W. (Ed.) Accounting for Worker Well-Being (Research in Labor Economics, Vol. 23), Emerald Group Publishing Limited, Bingley, pp. 359-379. https://doi.org/10.1016/S0147-9121(04)23011-4