(University of Chicago Press, 1994) Cramton, Peter; Tracy, Joseph S.
We present a bargaining model of union contract negotiations, in which the union decides between two threats: the
union can strike or continue to work under the expired contract. The model makes predictions about the level of
dispute activity and the form the disputes take. Strike incidence increases as the strike threat becomes more attractive,
because of low unemployment or a real wage drop during the prior contract. We test these predictions by estimating
logistic models of dispute incidence and dispute composition for U.S. labor contract negotiations from 1970 to 1989.
We find empirical support for the model's key predictions, but these associations are weaker after 1981.
