People sometimes turn down an offer even at some personal cost to themselves. Suppose, for example, that

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People sometimes turn down an offer even at some personal cost to themselves. Suppose, for example, that a firm decides to close a money-losing plant. To avoid additional costs that opposition to the closure might entail, the firm offers each employee a small payment in addition to the legally required minimum of one week of severance pay for each year of employment. If the employees do not accept the offer, they receive only the legal minimum. Why might the employees vote to reject the ultimatum?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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