1) The union and the firm are bargaining over a wage. The union's wage strategy is to offer Wu (t) = wu0 exp{-.01t} where wuo is the union's initial offer and t measures the length of the strike in weeks. The firm's strategy is to offer Wf (t) = wfo exp{.02t} where is the firm's initial offer. W f0 If wuo 100 and wfo=50, how long does the strike last? How does your answer change if wu (t) and wf (t) are common a) b) knowledge?
1) The union and the firm are bargaining over a wage. The union's wage strategy is to offer Wu (t) = wu0 exp{-.01t} where wuo is the union's initial offer and t measures the length of the strike in weeks. The firm's strategy is to offer Wf (t) = wfo exp{.02t} where is the firm's initial offer. W f0 If wuo 100 and wfo=50, how long does the strike last? How does your answer change if wu (t) and wf (t) are common a) b) knowledge?
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST9: Do Labor Unions Increases The Wages Of Workers?
Section: Chapter Questions
Problem 3CQ
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