The Role of Trust in Determining the Propensity to Join Unofficial Strikes
2014; Charles University; Volume: 8; Issue: 3 Linguagem: Inglês
ISSN
1802-4696
Autores Tópico(s)Social Policy and Reform Studies
ResumoAbstract This paper offers a contribution to the literature on labour strikes by analysing theeffect of trust in labour disputes. We maintain that the higher (or lower) the level of confidencethat workers place in unions (or firms), the more likely it is that they will be willing to partic-ipate in an unofficial strike. A very simple model is presented to clarify this idea. Using theWorld Value Survey data, we also empirically show that the probability of having or being will-ing to participate in unofficial strikes increases (or decreases) as the level of confidence placedin labour unions (or firms) increases, with the effect of confidence in labour unions being largerthan that of confidence in firms.Keywords Unofficial strike, trust, labour union, collective bargaining, self-serving biasJEL classification J01, J52 * 1. IntroductionAs noted by Holden and Moene (1998), modern game theoretical approaches are basedon the Godfather principle, namely: “I made him an offer that he couldn’t refuse.”In fact, as long as the relevant information in a bargaining process is commonknowledge to the participants, a bargaining impasse can be seen only as a randomerror caused by mistakes made by those bargaining. In spite of this prediction, strikesare not rare occurrences and there exists empirical evidence showing that strikes andlock-outs seem to follow a predictable pattern (Kennan 1986; Hibbs 1978; Ingham1974).This problem is known in the economics literature as the “Hicks Paradox”, wherebyif both sides of the bargaining table are rational and able to predict the outcome of astrike or lockout, they would tend to reach an agreement without engaging in a costlyconflict (see Hicks 1963). In this ambit, the occurrence of unofficial strikes is evenmore paradoxical, because workers could be subjected to legal sanctions which in-crease the cost of strike for them. According to Eldridge and Cameron (1964) anunofficial strike (also known as wildcat strike) is a strike which is not recognized bythe Executive Committee of a Union.Although it is difficult to have detailed international statistics on unofficial strikes,the Department of Labour of South Africa, for instance, reported that in 2012, 44%of total strikes were wildcat strikes with a peak of 57.5% in the mining sector. In
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