Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 9

Suppose a UAW labor contract with General Dynamics is being renegotiated. Some of the many issues on the table include job security, health benefits, and wages. If you are an executive in charge of human resource issues at General Dynamics, would you be better off ( a ) letting the union bear the expense of crafting a document summarizing its desired compensation, or ( b ) making the union a take-it-or-leave-it offer? Explain.