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Abstract:

Theoretical Economics Paper
Collective Bargaining under Complete Information
Carlos Diaz-Moreno and Jose E. Galdon-Sanchez
July 2000
Paper No' TE/2000/401:
Full Paper (pdf)

Tags: delays; sequential bargaining; structural estimation

In this paper, we build and structurally estimate a complete information bargaining model of collective negotiation for Spain. For large firms, the assumption of complete information seems a sensible one, and it matches the collective bargaining environment better than the one provided by private information models. The specification of the model with players having different discount factors allows us to measure their relative bargaining power, a recurrent question in the theory of bargaining. We find that both entrepreneurs and workers have high discount factors, and no evidence that entrepreneurs have bigger bargaining power as usually assumed.