Categories
Supply & Demand

Willingness to Settle

Mateo has been injured on the job and Cloud 9 is hoping to pay him enough so that he doesn’t sue the company. The problem? Mateo is undocumented and can’t accept the payment because he doesn’t have a social security number. Jeff (the regional manager) doesn’t know the reason and assumes that Mateo is just holding out for more money.

When it comes to buying things (in this case, Mateo’s right to sue), people rarely share their willingness to pay from the beginning. In an effort to earn some consumer surplus, people try to get things for less than they’re willing to pay.

Categories
Labor Labor Law

The Employees Go on Strike

A lot of the employees walked out while on their shift in the hopes of getting Glenn his job back. The regional manager has arrived and is working with Jonah and Amy to see how they can get the employees back to work. Initially, Amy and Jonah ask only for Glenn to have is job back, but they must sign a letter saying that they apologize for walking out. While it seems like a small request, they decide that the employees really deserve more. Part of the goal of unionization is to turn a competitive labor market into a monopoly provider of labor. Through collective bargaining, Amy and Jonah demand more for their group.