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Strike Ballots as a Commitment Device

Laszlo Goerke and Manfred J. Holler
Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift für die gesamte Staatswissenschaft
Vol. 155, No. 3 (Sept. 1999), pp. 487-504
Stable URL: http://www.jstor.org/stable/40752150
Page Count: 18
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Strike Ballots as a Commitment Device
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Abstract

The consequences of strike ballots are analysed in a non-cooperative model of negotiations between a union and a firm over wage increases. The firm possesses private information about its revenues. The union can only stop the firm from rejecting wage demands if a refusal is costly, due to a strike. However, under plausbile assumptions, strike threats are empty. Ballots will make strike threats credible if they provide sufficient commitment. For this effect to occur, the timing of voting is of crucial importance. If the legislator makes strike ballots compulsory, disputes can become more likely. Finally, principles of optimal majority rules for ballots are derived.

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