question archive Suppose an employer and employee are bargaining over a wage w for a job that produces a payoff of $170,000 - w for the employer and w - $30,000 for the employee
Suppose an employer and employee are bargaining over a wage w for a job that produces a payoff of $170,000 - w for the employer and w - $30,000 for the employee
Subject:EconomicsPrice:2.86 Bought6
Suppose an employer and employee are bargaining over a wage w for a job that produces a payoff of $170,000 - w for the employer and w - $30,000 for the employee. The employee has an outside option of $60,000, and the employer has an outside option of $50,000. If the bargaining weights are 0.45 for the employer and 1-0.45 for the employee, then what is w?
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The wage (w) for employer is $76,500 and $16,500 for employee with regards to the percentage of bargaining. Data shows that employer should accept the bargaining since the employer will earn more rather than choosing the outside option on the other hand employee should choose the outside option rather than accept the bargain since choosing the outside option will able the employee to earn more. Please see Table 1 for computation and further analysis.
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