1. Game theory emphasizes the interdependence of economic players, as well as the need for economic players to act in their best interests, based on what they believe the other side will do. Under game theory, does a benefit accrue to either side in “drawing a line in the sand,” during negotiations--as the union seems to have done in this article?

Taking a hard-line stance lowers the opportunity cost, because it increases the probability that you will reach an agreement closer to your preferred point, rather than your opponent’s preferred point.

2. As described in the article, what does the Taylor law do to the cost of not accepting the MTA’s contract proposal?

It significantly raises the opportunity cost of not accepting the proposal.

3. Assume that the union wins the dispute, and the MTA does not get any of its cost-saving measures passed. What will happen to the price of a ride on the New York City subway as a result?

In all likelihood, the price of a subway fare will increase.

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