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agents allocation space analysis analyze assumed assumption asymmetric information autarky bargaining process Bayes characterized charged next period choose to play commitment concave consider constraints contracts discriminate among firm environment with private equation equilibrium concept equilibrium strategy essay example expected utility extract information perfectly Farber feasible firm type function future value Harris and Townsend Hicks incentive compatible indifference curve individual rationality inference intervals information sets information structure instant of contact isoprofit curves labor levels labor streams last period Lemma low revenue max q mechanism menu of lotteries observable opportunity cost optimal outcome of bargaining Pareto Pareto optimal possible types private information profit maximizing Proof Proposition reservation price reservation value revelation game risk averse risk neutral sequence sequential games solution solves max specification strike duration surplus type 0 firm u's problem v's equilibrium v's type variable wage bill wage demands wage settlement wage-strike schedule workers zero