This paper analyses the voluntary disclosure strategies of a privately informed firm manager when the information is relevant to both a financial market for valuation purposes and a union for wage bargaining purposes. Disclosure of favourable information may adversely affect the terms under which the firm can secure the required flow of labour and may thus lead to a decrease in the firm's market value. The paper shows that both a full‐disclosure and a nondisclosure equilibrium may exist, which contradicts an earlier analysis of the issue made by Pope and Peel (1981).
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Martin Frantz Walker Pascal (1997) studied this question.