Jon Elster has written several articles over the years arguing for a greater need to incorporate emotions into economics. I have given a couple of lectures on this in the last year.
The RTE Frontline programme last Monday is a good example of the emotional aspect of bargaining involved here. It is possible that all the participants are super-rational employing their emotions as tools in a subtle bargaining process. You can look at the debates and make your mind up. The placement of the audience separately with one side being the "public" and the other side being the "private" sector help to excarbete some of the tensions. A lot of the audience looked seriously strained and worried, as well as extremely angry in places. Much of the anger is driven by perception of being treated unfairly with regard to an outgroup. The role of such emotions in actually effecting bargaining processes and economic behaviour is something we should think about further, particularly as we enter what is likely to be an emotionally charged debate leading up to the budget.
1 comment:
Is this simply a case of public-sector workers being unwilling to anchor their wage expectations against that of the private-sector by displaying false indignation to improve their bargaining position?
Or, that there's no reasonable reference point out there, due to a dearth of (recent) earnings data? (By recent, I mean beyond the 2006 and 2007 studies by the ESRI and CSO, respectively.)
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