Negotiations, monopolies and unions
Dec. 2nd, 2012 03:00 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
jackThinking about negotiations recently, it occurred to me a lot of the negotiating advantage goes to the party with more of a monopoly.
If you have two or three widget companies, and millions of widget-makers, the power is largely with the company, because if the company proposes an insultingly low wage, the widget maker's options are (a) accept it or (b) not have a job. The company can assume that sufficiently many widget makers will accept the deal. The same thing may happen even if there's a shortage of widget makers, to a lesser extent.
Conversely, if all the widget makers join one union, the companies are at a similar disadvantage.
The phenomenon of monopolistic companies and monopolistic unions is exactly the same from a game theory perspective, even though they can have very different social effects for practical and historical reasons. But it's easy to get polarised into "companies good, unions bad" or "companies bad, unions good" depending which examples they've seen a lot of in real life or propaganda.
If you have two or three widget companies, and millions of widget-makers, the power is largely with the company, because if the company proposes an insultingly low wage, the widget maker's options are (a) accept it or (b) not have a job. The company can assume that sufficiently many widget makers will accept the deal. The same thing may happen even if there's a shortage of widget makers, to a lesser extent.
Conversely, if all the widget makers join one union, the companies are at a similar disadvantage.
The phenomenon of monopolistic companies and monopolistic unions is exactly the same from a game theory perspective, even though they can have very different social effects for practical and historical reasons. But it's easy to get polarised into "companies good, unions bad" or "companies bad, unions good" depending which examples they've seen a lot of in real life or propaganda.