Wage Negotiations Upended: Matching Model Reveals Unequal Bargaining Power
The study challenges the traditional way of negotiating wages in labor economics. Instead of using a Symmetric Nash Bargaining Solution, the researchers suggest considering the negotiation power of each person involved. By comparing this approach with the Kalai-Smorodinsky Solution, they found that negotiation outcomes may vary depending on the strength of each party. This new perspective could help better understand how wages are determined in job matching scenarios.