Who Should Draft a Union Contract in Game Theory?
The UAW labor contract with General Dynamics expired in October 2001. In the months preceding the expiration date, bargaining teams for the UAW and General Dynamics met to negotiate a new contract. All contracts must be ratified by the union members. Some of the many issues on the table included job security, health benefits, and wages. If you were an executive in charge of human resource issues at General Dynamics, would you be better off
(a) letting the union bear the expense of crafting a document summarizing its desired compensation, or
(b) making the union a take-it-or-leave-it offer? Explain.
...The equilibrium for this game is either hawk-dove or dove-hawk. If one member thinks the other is going to be hawk, they will chose dove. You can look up this in any game theory model and even google it and it will come up. The important thing is that the first one to be hawk has an advantage.
In bargaining, there are really high costs to things not working out to both parties. Strikes hurt workers and employers and damage ...