{"title":"How Does Kantian Optimization Matter in Union Bargaining Agenda?","authors":"Leonard F. S. Wang, Di Wu, Can Yang","doi":"10.1002/mde.4548","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>This paper examines union bargaining choices between RTM (right-to-manage) and EB (efficient bargaining) under Kantian optimization. We show that Kantian optimization constitutes a subgame perfect equilibrium, yielding higher firm profits and labor benefits than Nashian equilibrium, though potentially reducing consumer surplus. In Kantian optimization, the cooperation between the owners will hold the conventional belief that profits under RTM exceed those under EB, while the outputs under EB exceed those under RTM. But the workers' wages are reversed. The endogenous choice between the Kantian and Nash principles by firms and unions leads to higher wages and improves individual worker's welfare.</p>\n </div>","PeriodicalId":18186,"journal":{"name":"Managerial and Decision Economics","volume":"46 6","pages":"3657-3665"},"PeriodicalIF":2.7000,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Managerial and Decision Economics","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1002/mde.4548","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper examines union bargaining choices between RTM (right-to-manage) and EB (efficient bargaining) under Kantian optimization. We show that Kantian optimization constitutes a subgame perfect equilibrium, yielding higher firm profits and labor benefits than Nashian equilibrium, though potentially reducing consumer surplus. In Kantian optimization, the cooperation between the owners will hold the conventional belief that profits under RTM exceed those under EB, while the outputs under EB exceed those under RTM. But the workers' wages are reversed. The endogenous choice between the Kantian and Nash principles by firms and unions leads to higher wages and improves individual worker's welfare.
期刊介绍:
Managerial and Decision Economics will publish articles applying economic reasoning to managerial decision-making and management strategy.Management strategy concerns practical decisions that managers face about how to compete, how to succeed, and how to organize to achieve their goals. Economic thinking and analysis provides a critical foundation for strategic decision-making across a variety of dimensions. For example, economic insights may help in determining which activities to outsource and which to perfom internally. They can help unravel questions regarding what drives performance differences among firms and what allows these differences to persist. They can contribute to an appreciation of how industries, organizations, and capabilities evolve.