Question

Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one-shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. If you were the labor union, which type of "rules of play" would you prefer to divide the $50 surplus?

A. One-shot simultaneous-move game and one-shot sequential-move game with management as the first mover.

B. One-shot simultaneous-move game.

C. One-shot sequential-move game with labor union as the first mover.

D. One-shot sequential-move game with management as the first mover.

Answer 1

Given data:

· Management and a labour union are bargaining = $50 surplus to give to the union.

· The $50 is divisible up to one cent.

· Both players get zero if the total amounts asked for exceed $50.

· Which type of "rules of play" would you prefer to divide the $50 surplus?

Unions and union–management relations are also of special importance in that, through collective bargaining and other formal and informal means of interaction, unions and employers establish the wages, hours, and working conditions of large numbers of workers.

Labour-management relations include aspects of industrial life such as collective bargaining, trades unionism, discipline and grievance handling, industrial disputes, employee participation in management and the interpretation of labour laws.

The collective bargaining process is a key part of industrial relations.

The correct option is c

One-shot sequential-move game with labour union as the first move