There is no commonly accepted economic theory of strikes. The main obstacle is that if one has a theory which predicts when a strike will occur and what the outcome will be, the parties can agree to this outcome in advance, and so avoid the costs of a strike. strikes are apparently not Pareto optimal, since a strike means that the pie shrinks as the employer and the workers argue over how it should be divided. If the parties are rational, it is difficult to see why they would fail to negotiate a Pareto optimal outcome. Hicks suggested 2 possible explanations for strikes: either the union is trying to maintain a “reputation for toughness”, or there is private information on at least 1 side of the bargaining table

the best outcome is for GM to die quickly.

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