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Two firms {1,2} produce widgets. Each firm has an employee, denoted _; and a manager, denoted _. Each firm must decide on a wage to
Two firms {1,2} produce widgets. Each firm has an employee, denoted _; and a manager, denoted _. Each firm must decide on a wage to pay their employees, denoted _. In a first stage, the two employees must simultaneously decide between 'Accepting' () the status quo wage of 20 per hour; or going on 'Strike' () for a raise to 30 per hour. Employee utility is simply their wage: _(_ )=_. If both employees choose , they both receive _(_ )=20 and the game ends. If one employees choose and the other chooses , the 'Accepter' receives _(_ )=20, the 'Striker' is fired and receives _(_ )=0, and the game ends
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