This analysis of bargaining settlements in 1982–83 shows that, on average, shareholders in those firms that negotiated concessionary settlements enjoyed an 8 to 10 percent increase in the value of their holdings. The author interprets this result to mean not that the value of the firm increased, but rather that concessions enlarged the shareholders' portion of the firm's value at the expense of the workers' portion. On the other hand, concession bargaining does not seem to have reallocated business risk between shareholders and labor. Finally, the evidence suggests that firm-specific sources of risk can explain, in part, not only the magnitude of the concession effects but also the probability that concession bargaining will occur.
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