Short-term contracts and exogenous productivity growth are introduced in asimple wage bargaining model. The equilibrium … credible, but neverwhen strike is not credible. In the limit as time between bargaining roundsvanishes only the first paradox …

We report results from a laboratory experiment on strategic bargaining with indivisibilities studying the role of … have on bargaining power and identify how subjects' observed behavior systematically deviates from theoretical predictions …' heuristic which equates bargaining power with recognition probabilities to explain these findings …