Title

An Economic Theory of the Duty to Bargain

Document Type

Article

Publication Date

1994

ISSN

0016-8092

Publisher

Georgetown University Law Center

Language

en-US

Abstract

Professor Hylton's paper presents an economic theory of the duty to bargain in good faith under the National Labor Relations Act. The duty to bargain alters bargaining incentives in two ways. First, it imposes a duty to disclose relevant information on the informationally advantaged party. Second, by conditioning the right to act unilaterally on satisfaction of bargaining obligations, the duty to bargain brings about a partial reallocation of the parties' entitlements. This partial reallocation increases the potential gains from honest contracting relative to the benefits of exploiting an informational advantage and thus alters incentives in a way that makes honest dealing more likely.

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