Intra-firm Bargaining under Non-binding Contracts

S-Tier
Journal: Review of Economic Studies
Year: 1996
Volume: 63
Issue: 3
Pages: 375-410

Authors (2)

Lars A. Stole (University of Chicago) Jeffrey Zwiebel (not in RePEc)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We present a new methodology for studying the problem of intra-firm bargaining, based on the notion that contracts cannot commit the firm and its agents to wages and employment. We develop and analyse a general non-cooperative multilateral bargaining framework between the firm and its employees and consider outcomes which are immune to renegotiations by any party. Equilibrium firm profits are characterizable as both a weighted average of a neo-classical (non-bargaining) firm's profits and a generalization of Shapley value for a corresponding cooperative game. Furthermore, the resulting payoffs induce economically significant distortions in the firm's input and organizational-design decisions.

Technical Details

RePEc Handle
repec:oup:restud:v:63:y:1996:i:3:p:375-410.
Journal Field
General
Author Count
2
Added to Database
2026-01-29