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Efficient Bargaining and Accommodation Policies

Published online by Cambridge University Press:  17 August 2016

Henrik Jensen
Henrik Jensen*
Affiliation:
University of Aarhus
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Summary

We show that accommodation policies may render efficient bargaining in the labour market unsustainable as a perfect Nash equilibrium of the infinitely repeated game. In fact, in the eyes of the labour market participants, efficient bargaining may be Pareto-dominated by the monopoly-union solution when the government places sufficiently high weight on employment targets.

Résumé

Résumé

Nous montrons que des politiques économiques accommodantes rendent irréalisable une négociation efficiente sur le marché du travail, débouchant sur un équilibre de Nash parfait pour un jeu répété indéfiniment. En fait, aux yeux des participants au marché du travail, la négotiation efficiente est dominée, au sens de Pareto, par la solution du monopole syndical lorsque le gouvernement attache un poids suffisamment important aux objectifs d'emploi.

Keywords

E61E62J51E61E62J51
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 59 , Issue 4 , 1993 , pp. 463 - 484
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1993 

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Footnotes

*

Torben M. Andersen, Jan Rose Sørensen, one anonymous referee and participants of the European Economic Association's seventh annual congress, Dublin, August 1992, have provided me with beneficial comments and suggestions. Of course, I am responsible for any errors and hazy points.

References

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