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Wage Bargaining:

Wage Bargaining: Reconsider the wage bargaining game from class, where pilots outside option so is private information, and United believes that it is uniformly dis- tributed on 0,10). As in class, assume that United makes a take-it-or-leave-it wage offers to the pilots. If the pilots reject the offer, United goes bankrupt. 

(a) Calculate the optimal offers for profits (before salaries) 7 = 16. Are there any mutually beneficial trades that do nor occur in equilibrium?

 (b) Calculate the optimal offer s for profits (before salaries) 7 = 20. Are there any mutually beneficial trades that do nor occur in equilibrium? Discuss.

Labour-Economics   
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