In this case, the starving person presumably has to press the button or else starve to death, and thus has no bargaining power. The other person only has to offer the bare minimum beyond what the starving person needs to survive, and the starving person must take the deal. In Econ 101 (assuming away monopolies, information asymmetry, etc.), exploited workers do have bargaining power by being able to work for other companies, hence why companies can’t just do stupid, spiteful actions in the long term.
In Econ 101 (assuming away monopolies, information asymmetry, etc.), exploited workers do have bargaining power by being able to work for other companies
I guess this is the part where the real life often differs from the simplified model. Information asymmetry seems to be the norm. In small cities, big companies can become local monopolies on providing job opportunities of a certain kind (yes, you could choose to work for a different company, but that could be 3 extra hours of commute). Companies providing rare kinds of job opportunities love to have NDAs, non-poaching agreements, etc.
In this case, the starving person presumably has to press the button or else starve to death, and thus has no bargaining power. The other person only has to offer the bare minimum beyond what the starving person needs to survive, and the starving person must take the deal. In Econ 101 (assuming away monopolies, information asymmetry, etc.), exploited workers do have bargaining power by being able to work for other companies, hence why companies can’t just do stupid, spiteful actions in the long term.
I guess this is the part where the real life often differs from the simplified model. Information asymmetry seems to be the norm. In small cities, big companies can become local monopolies on providing job opportunities of a certain kind (yes, you could choose to work for a different company, but that could be 3 extra hours of commute). Companies providing rare kinds of job opportunities love to have NDAs, non-poaching agreements, etc.