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Application of strategic fuzzy games to wage increase negotiation and decision problems

Lookup NU author(s): Dr Festus Oderanti, Professor Feng Li

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Abstract

We propose a flexible decision support scheme which could be used in managing the wage negotiation between employers and employees. This scheme uses fuzzy inference systems and game theory concepts in arriving at decisions on future wage increase which could be more mutually agreeable. For example, rather than specifying 5% yearly increase of wages, we propose that the uncertain factors which are mostly difficult to predict and that could affect wage decisions need to be taken into consideration by the wage formula. These include business revenues or (profit), inflation rate, number of competitors, cost of production, and other uncertain factors that may affect business operations. The accuracy of the fuzzy rule base and the game strategies will help to mitigate the adverse effects that a business may suffer from these uncertain factors. Based on our scheme, we propose that employers and employees should calculate their future wage by using a fuzzy rule base and strategies that take into consideration these uncertain variables. The proposed approach is illustrated with a case study and the procedure and methodology may be easily implemented by business organisations in their wage bargaining and decision processes.

Publication metadata

Author(s): Oderanti FO, Li F, DeWilde P

Publication type: Article

Publication status: Published

Journal: Expert Systems with Applications

Year: 2012

Volume: 39

Issue: 12

Pages: 11103–11114

Print publication date: 02/04/2012

ISSN (print): 0957-4174

ISSN (electronic): 1873-6793

Publisher: Pergamon

URL: http://dx.doi.org/10.1016/j.eswa.2012.03.060

DOI: 10.1016/j.eswa.2012.03.060

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