Industrial Relations and Game Theory

Paper Summary:

This paper explains that industrial relations within the context of the British economy and the character of its workforce have long been dominated by the power and presence of its unions. The author points out that, because of the stakes involved in the collective bargaining negotiations, game theory (GT) and coalition theory, which is a subset of GT, is relied upon to achieve fractional improvements in contract negotiations. The paper relates that game theory (GT) is most often associated with a zero-sum scenario; however, it also encompasses positive-sum and negative-sum scenarios where a party may gain or win without the necessity of an equivalent loser. The author relates that, because of the necessity to form alliances in order to reach consensus among diverse stakeholders, industrial relations often employ a type of GT known as coalition theory,which examines the nature, reasons and underlying dynamics of these coalitions that form in all the various settings. The paper includes graphs.

Table of Contents
Introduction
Game Theory
Industrial Relations and Game Theory
Conclusion

From the Paper:

"Of particular value has been research integrating sender-receiver frameworks that analyze how knowledge is transferred, both symmetrically and asymmetrically, with GT whereby advantages gained through asymmetrical knowledge transfer creates zero-sum advantages for one player or the other in an industrial relations setting such as the collective bargaining platform. This concept is explained in terms of being a signal that one side uses to inform the other of a possible solution, such as concessions that can be made on benefits."

Sample of Sources Used:

• Addison, J. T., Heywood, J. S., & Wei, X. 2003. New Evidence on Unions and Plant Closings: Britain in the 1990s. Southern Economic Journal, 69(4), 822+.
• Brams, S. J. 2003. Negotiation Games: Applying Game Theory to Bargaining and Arbitration. New York: Routledge.
• Brams, S. 2000. Game Theory: Pitfalls and Opportunities in Applying It to International Relations. International Studies Perspectives, 1/3, p.221.
• Browne, W. 2001. Rural Failure: The Linkage between Policyand Lobbies. Policy Studies Journal 29.1, p.108.
• Gospel, H. & Wood, S. (Eds.). 2003. Representing Workers: Trade Union Recognition and Membership in Britain. London: Routledge.

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