Bachelor thesis in mathematics economics

A game theoretic approach to strikes and negotiations

Abstract: [Danish version]

This thesis discusses strikes and negotiations from a perspective of bargaining theory using perfect information. The more general notion of surplus destruction is used throughout the thesis and describes the situation---arising from, for instance, strikes---in which some or all of the surplus is destroyed.

Part I summarizes and discusses the existing literature. This includes a brief introduction to the game theoretic framework and a presentation of the Rubinstein model. We then proceed to essentially two different models: the models by Fernandez & Glazer and by Busch, Shi & Wen, respectively, serve as the cornerstones of the analysis.

Part II presents our own results. These include a more general model that includes Fernandez & Glazer's as well as Busch, Shi & Wen's models as extremes and a continuous transition between the two. Further, we add surplus regeneration to the model where the firm has the possibility of regenerating some of the surplus destroyed by the union. We show that equilibria with surplus regeneration exist in both Fernandez & Glazer and Busch, Shi & Wen.

Advisor Eliot Maenner
Authors Jerôme Baltzersen and Dominik Dienst
Size 15 ECTS-points
Language English
Handed in July 4 2008
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