A recent newspaper article reported that a transit union went on strike because they believed that the management team was not being truthful about their inability to afford wage increases. Which strike theory explains this situation?
A) total joint costs theory
B) asymmetric information theory
C) pay security theory
D) Hicks theory

Question

Quizplus · Accepted Answer

The situation described in the question relates to asymmetric information theory, which suggests that strikes occur when there is a lack of transparency and trust between management and workers, leading to concerns about management's true financial position. In this case, the union suspects that the management team is not being truthful about their ability to afford wage increases, indicating a lack of trust and a possible information asymmetry.

A Recent Newspaper Article Reported That a Transit Union Went