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Bargaining and the Joint-Cost Theory of Strikes: An Experimental Study

Journal of Labor Economics 1990 8(1, Part 1), 48-74
This article reports on an experiment that was designed to test predictions about the frequency of disagreement (strikes) in games with complete information. An empirical test of the "joint-cost" theory, which relates strike activity to the marginal cost of striking, is based on a set of "shrinking pie" games in which subjects bargained in consecutive periods over how to divide a sum of money. Strike activity was a frequent occurrence in these games and, moreover, did not disappear over time. The joint-cost theory received some support, indicating that further tests may be useful.