Game Theory and Labor Conflict

Abstract

Game theory is a type of rational decisionmaking model. As such, it assumes well-defined actors who know they are in conflict, know their strategic options, and have stable evaluations of possible outcomes. Furthermore, it is ahistorical. These assumptions severely limit the theory, particularly in its application to labor conflict. Evidence is presented that labor conflict is an historically-shaped process in which sides are not always clearly defined, actors are often unaware that they are in a conflict, and in which many strategic options emerge and evaluations change in the course of struggle. Game theory assumptions are more likely to be met during periods of stable prosperity in which neither rank and file workers nor “outside” employers intervene in negotiations. When the assumptions are not met, resulting conflict types can be categorized by whether strategies and payoffs are known or emergent, and by the number of sides that are organized.