Initial Offers and Outcomes in Wage Barganing: Who Wins?
- Autores: Sergi Jiménez Martín, Jaume García Villar
- Localización: Documentos de trabajo ( FEDEA ), ISSN 1696-7496, Nº. 22, 2007, págs. 1-34
- Idioma: inglés
- Enlaces
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Resumen
The initial works council�s wage claim, and the initial firm�s (counter)offer, as well as the fraction of the disputed wages the works council is able to capture conditional on initial disagreement, are analyzed using Spanish data on wage settlements. After a given initial wage claim, the rules of the system force the firm either to accept it or to make a counteroffer prior to a fixed and short deadline. In this context signaling models predict that the wage claim should try to screen the firm�s level of profitability, while the (most likely forced) offer is expected to reveal little information. Both hypotheses are tested and neither one is rejected. The analysis of the fraction of the disputed wages the workers get after initial disagreement, as well as the length of the negotiation period, provide further evidence in favor of signaling models since we find they are related to both observed and private information. Moreover, conditional on covariates, for a number of sectors we cannot reject that the parties �split the difference� between both initial offers. This solution coincides with Rubinstein�s (1982) wage, the solution for the complete information game.
