Negotiation between management and labor.
Suppose you have a negotiation situation among Management and Labor concerning Labor salary. Management and Labor do well when they each do the opposite of what the others does i.e.
The best situations for both are:
(i)for management to bargain hard (offer low wages) and labor to accommodate (accepts and contract offered) and
(ii) for Management to accommodate (offer generous wages) and Labor to bargain hard (threatens to strike).
a.If Management moves first what would you expect the equilibrium of this sequential game. To be.
b.If labor moves first what would you expect the equilibrium of this sequential game to be.
c.Is this a game with a forst mover or last mover advantage?