Strikes and profits: considering an asymmetric information model

The Hayes asymmetric information model of strike activity predicts a negative relationship between actual firm profits and strike frequency, and a positive relationship between the trade union's expectations of firm profitability and the duration of strikes. Results from the application of the model presented in this paper provide only limited support: the relationship between strike behaviour and profits is found to be more complex than the model allows for and exploring other variables which are expected to influence strike activity leads to more satisfactory results.