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The Kalai-Smorodinsky Bargaining Solution in Wage Negotiations
The Journal of the Operational Research Society
Vol. 43, No. 8, Mathematical Methods and Models in Honour of Steven Vajda (Aug., 1992), pp. 779-786
Stable URL: http://www.jstor.org/stable/2583096
Page Count: 8
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This paper characterizes the Kalai-Smorodinsky bargaining solution when firms and unions negotiate over wages alone, and firms set the level of employment in order to maximize profits given the agreed wage. The Kalai-Smorodinsky solution is analysed for the case that the wage elasticity of employment and the union's risk aversion are both constant. In this case there is a simple relationship between the Kalai-Smorodinsky and the Nash solutions.
The Journal of the Operational Research Society © 1992 Operational Research Society