Our purpose in this article is to analyze changes in the German wagebargaining system, a system that has attracted enormous attentionfrom scholars of comparative political economy and comparativeindustrial relations. We argue that the wage bargaining portion ofthe German model is neither frozen in place, headed for deregulation,nor merely “muddling through.” Rather, we see the institutionalcapacities of the key actors—especially the unions and employerassociations—making possible a process we term “experimentalism.”In briefest form, experimentalism allows organizations that combinedecentralized information-gathering abilities with centralized decision-making capacity to probe for new possibilities, which, oncefound, can be quickly diffused throughout the organization. We willshow that the capacity for such experimentalism varies across actorsand sectors. And, to make things even tougher, neither major Germansocial actor can sustain innovation in the longer term withoutbringing along the other “social partner.”
Wage bargaining as an optimal control problem: a dynamic version of the efficient bargaining model
