Employers Can Boost Worker Productivity by Adjusting Bargaining Power
In this research, bargaining between workers and employers for fair contracts in situations where one party can take advantage of the other is studied. They looked at two ways deals are made: one where both sides aim to protect their own interests (Nash solution) and another where they try to reach a compromise (Kalai-Smorodinsky solution). The effort level of employees can change based on who holds more bargaining power. By giving more bargaining power to workers, the best outcome can be achieved by reducing unfairness due to the agreement terms. In some cases, boosting the workers' say in the deal is more crucial in the Nash solution compared to the Kalai-Smorodinsky solution to reach the ideal situation.