PUBLIC-SECTOR COLLECTIVE BARGAINING: LESSONS FROM GAME THEORY
LAWRENCE J. HABER
JOHN WELLINGTON
DOI: 10.2190/BPAG-2924-9XM4-0L30
Abstract
Negotiations between management of a company or agency and unions representing its workers recur at more or less regular intervals over time. In each of the negotiations, each party has the incentive to cooperate with the other for mutual benefit, and simultaneously, the incentive to seek gain at the other's expense. The authors analyze these incentives in the context of a repeating series of Prisoner's Dilemma games. The conclusion drawn is that cooperative bargaining relations are most easily maintained when threats made are credible and, yet, when there is sufficient restraint exercised by the parties that trust between them is maintained. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.