Union Militancy, External Shocks, and the Accommodation Dilemma
1985 (English)Report (Other academic)
Stabilization policy under centralized wage-setting is represnted as a non-cooperative game between an encompassing union and the government. The dilemma of the government is whether or not to accommodate supply disturbances when it cannot tell if they are due an intentionally militant wage policy or to unforeseen external price shocks. In a single round of wage setting, there is no government strategy which can both guarantee full employment and prevent union militancy. In a repeated game, however, there exists a conditional accommodation policy, which permits accommodation of supply shocks while inducing the union to refrain entirely from a militant wage policy.
Place, publisher, year, edition, pages
Stockholm: IIES , 1985. , 32 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 320
IdentifiersURN: urn:nbn:se:su:diva-41345OAI: oai:DiVA.org:su-41345DiVA: diva2:329543