Resumen de Bargainning, reputation and strikes

Vicente Calabuig, Gonzalo Olcina Vauteren

• This paper analyses a finitely repeated wage bargaining game, where the union's strike decision is endogenous, but there is incomplete information about his striking strategy space. We characterize the equilibrium path and the equilibrium payoff of all Sequential Equilibria, following the techniques of Schmidt (1993). We obtain a finite bound, independent of the horizon of the repeated game, in the number of periods in which the firm tests the union and in which there are strikes. We also show that for a sufficiently long horizon, the union can credibly threaten to strike and obtain a high wage for most of the periods.