1) The union and the firm are bargaining over a wage. The union's wage strategy is to offer Wu (t) = wu0 exp{-.01t} where wuo is the union's initial offer and t measures the length of the strike in weeks. The firm's strategy is to offer Wf (t) = wfo exp{.02t} where is the firm's initial offer. W f0 If wuo 100 and wfo=50, how long does the strike last? How does your answer change if wu (t) and wf (t) are common a) b) knowledge?

1) The union and the firm are bargaining over a wage. The union's wage strategy is to offer Wu (t) = wu0 exp{-.01t} where wuo is the union's initial offer and t measures the length of the strike in weeks. The firm's strategy is to offer Wf (t) = wfo exp{.02t} where is the firm's initial offer. W f0 If wuo 100 and wfo=50, how long does the strike last? How does your answer change if wu (t) and wf (t) are common a) b) knowledge?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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