PRIMJENA DIFERENTNIH JEDNADŽBI U MODELIRANJU PREGOVORA RADNIKA I MENADŽMENTA
APPLICATION OF DIFFERENCE EQUATIONS TO LABOR- MANAGEMENT NEGOTIATIONS

Summary/Abstract: Difference Equations play an important role in the construction and analysis of mathematical models of economics processes. In this paper we consider a simple model of a wage dispute between labor and management. Namely, the dispute centers on the fact that labor is asking for a salary of 0L a year, but management’s initial offer is 0M a year, which is less than demand of labor. At each step of negotiations, the labor representatives submit a wage demand to management, and management presents its counteroffer. We except that management’s offer is less than wage demand of labor. A mathematical model of this situation is described by the system of two linear difference equations of first order.

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