The bargainers’ objective functions III

A second important feature of the bargaining process helps to explain the gradual convergence that takes place between the TWU Local 100 resistance curve and the MTA’s concession curve. At each round of negotiations the bargainers have to reestimate their objective functions and their best wage demands. It is likely that if a strike is utilized as a bluffing technique then as the deadline approaches the bargainers’ estimate of both the probability of a strike and the amount of strike costs will increase as they face the reality of a shutdown. The wage demands of TWU Local 100 and the MTA will also converge as the strike deadline forces them to concede bargaining of secondary importance in order to resolve the issues that are major stumbling blocks towards an agreement. As the bargaining process continues therefore both the TWU Local 100 and MTA are forced to reevaluate their most favorable bargaining demands as their subjective estimates of the benefits and costs change over the negotiations. Each point on the resistance and concession curves is thus the best wage demand that comes out of this dynamic to make the best of each bargainer’s objective function.

A third insight concerns the fundamental importance of the right to strike in collective bargaining. As many of you are aware the Taylor law has denied us the right to strike - that is the yardstick of a strike in its ability to impose costs on the New York City economy which the mayor of New York City has to answer for. However that indirect cost does not pass on to the MTA. Therefore based on that the MTA is severely restricted and the MTA has little incentive to bargain with TWU Local 100 or compromise to reach an agreement. In addition to those executives in the MTA that do not reside in New York City or utilize public transportation they are out of touch with the average New Yorker’s desires for premier mass transportation. They do not answer directly to the mayor of New York City based on the above. Without the threat of a strike or some other cost imposing sanctions on New York City economy the MTA best wage offer in this case is the lower limit of the contract zone.