Power Processes in Bargaining

This is a theoretical article that integrates and extends a particular program of work on power in bargaining relationships. Power is conceptualized as a structurally based capability, and power use as tactical action falling within either conciliatory or hostile categories. The core propositions are (1) the greater the total amount of power in a relationship, the greater the use of conciliatory tactics and the lower the use of hostile tactics; and (2) an unequal power relationship fosters more use of hostile tactics and less use of conciliatory tactics than an equal power relationship. Distinct research on power dependence and bilateral deterrence provides support for both propositions. Implications are discussed for power struggle in ongoing relationships

Gradual Nash Bargaining with Endogenous Agenda: A Path-Dependent Model

This article proposes a method for considering the bargaining agenda as an endogenous phenomenon in gradual bargaining games, understood as being path-dependent processes. Some short, medium and long-term results for bargaining are presented, as well as a possible application for the model.Game theory, Bargaining, Path-Dependent Processes

Metatheory and Friendly Competition in Theory Growth: The Case of Power Processes in Bargaining

[Excerpt] This paper analyzes the theoretical development taking place in a program of research on power processes in bargaining (see Bacharach and Lawler 1976, 1980, 1981a, 1981b; Lawler and Bacharach 1976, 1979, 1987; Lawler, Ford, and Blegen 1988; Lawler and Yoon 1990; Lawler 1986, 1992). The theoretical program takes as its starting point a situation where individuals, groups, organizations, or even societies with conflicting interests voluntarily enter into explicit bargaining. Explicit (as opposed to tacit) bargaining assumes the mutual acknowledgment of negotiations, conflicting issues along which compromise is possible, and open lines of communication through which parties can exchange offers and counteroffers in an attempt to resolve the issues that divide them (Schelling 1960; Bacharach and Lawler 1980; Boyle and Lawler 1991). The scope of this theoretical research program assumes further that the parties have a power capability, that they use this power tactically in an effort to achieve desired outcomes, and that they strive for a favorable position during the bargaining process

The Decentralization of Wage Bargaining: Four Cases

The paper contributes to the discussion about the possible trends and processes towards decentralization of wage bargaining or wage setting within the OECD-countries since the 1970s. Based on a data set of 16 OECD countries from 1950 to 2000 our results show that in terms of bargaining level the trend is clear towards decentralization since the 1970s, even though there are important exceptions. In terms of confederal involvement the major decrease occurs among the Nordic countries and the Netherlands, whereas many of the other countries have had a status quo more or less. In terms of government involvement, however, the change is the almost non-existent. The overall tendency is still towards less centralisation, even though a number of countries have not changed or have moved in the opposite direction. Sweden, Denmark, UK and the Netherlands experience the largest decreases in decentralization overall. The processes of decentralization of wage bargaining look very differently in each country. It may occur through changes in the collective agreements themselves or through individual wage-setting outside the system of collective agreements. And the decentralization process may occur both in a context of cooperation between the labor-market organizations or in a setting of conflicts.Wage bargaining; wage setting; collective agreements; centralization; decentralization; labour market models; OECD

Los Angeles Labor Negotiations Study

[Excerpt] Sjoberg Evashenk Consulting and Cornell University have completed a study of the City of Los Angeles’ labor negotiation policies, processes and practices, under contract with the City Controller’s Office. The objectives of the study are to: • Review negotiations executed within the last three years for lessons learned, as well as review negotiations currently underway. • Evaluate and map the City’s current collective bargaining process. • Conduct a nationwide search for promising practices the City could incorporate into the collective bargaining process. • Evaluate the fiscal impacts of labor negotiations. • Evaluate the role of and incentives for each party in the process. • Evaluate the labor-management relationships outside of the bargaining process. • Identify opportunities for improving labor-management relations. Cornell University addressed the City’s current labor relations process and identified areas for improvement or consideration (Sections I and III), while Sjoberg Evashenk Consulting focused on the financial implications of the City’s collective bargaining practices (Section II). Cornell ILR faculty who contributed their time to this study include: Associate Dean Suzanne Bruyere, Marcia Calicchia (Project Lead), Lou Jean Fleron, Professor Emeritus and former Associate Dean Lois S. Gray, Dean Harry Katz, Sally Klingel, Peter Lazes, Tom Quimby, Jane Savage, Rocco Scanza, Scott Sears, and Associate Dean and Vice Provost for Land Grant Affairs Ronald Seeber. Pam Strausser in Cornell’s Office of Human Resources and Mildred Warner in Cornell’s Department of City and Regional Planning also provided invaluable assistance

Learning to Like What You Have - Explaining the Endowment Effect

The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose preferences embody an endowment effect. The reason is that an endowment effect improves one's bargaining position in bilateral trades. We show that for a general class of evolutionary processes strictly positive endowment effects will survive in the long run.endowment effect, evolution, bargaining

The right to know: disclosure of information for collective bargaining and joint consultation

The legal obligation on employers to provide information to employees has grown since the early 1970s. At that time, the emphasis was on disclosure for collective bargaining. In the 1980s and 1990s, the emphasis shifted more to disclosure for joint consultation. In the context of new legislation, the possibility of further interventions from Europe, and a greater commitment to openness in other areas of company and public life, disclosure of information for collective bargaining and joint consultation at work is again on the agenda. This article focuses on disclosure for both of these processes. Disclosure for collective bargaining is the most developed and potentially significant area of the law from an industrial relations perspective. Disclosure for joint consultation, however, has been the most dynamic area in recent years. Voluntary information provision by firms has also been a significant part of developing human resource management practice. The paper therefore provides a broad examination of the law on disclosure. The UK provisions are conceptualised as constituting an agenda-driven disclosure model; i.e. the trigger for their use lies within the bargaining agenda. By contrast, the provisions stemming from European initiatives are event-driven; i.e. they are triggered by specific employer initiated events that affect employment contracts in other ways irrespective of the representative context. In the final sections, we attempt a broader evaluation of the intent and impact of the legislation and assess the pros and cons of the different approaches

Quantifying Inefficiency of Fair Cost-Sharing Mechanisms for Sharing Economy

Sharing economy is a distributed peer-to-peer economic paradigm, which gives rise to a variety of social interactions for economic purposes. One fundamental distributed decision-making process is coalition formation for sharing certain replaceable resources collaboratively, for example, sharing hotel rooms among travelers, sharing taxi-rides among passengers, and sharing regular passes among users. Motivated by the applications of sharing economy, this paper studies a coalition formation game subject to the capacity of $K$ participants per coalition. The participants in each coalition are supposed to split the associated cost according to a given cost-sharing mechanism. A stable coalition structure is established when no group of participants can opt out to form another coalition that leads to lower individual payments. We quantify the inefficiency of distributed decision-making processes under a cost-sharing mechanism by the strong price of anarchy (SPoA), comparing a worst-case stable coalition structure and a social optimum. In particular, we derive SPoA for common fair cost-sharing mechanisms (e.g., equal-split, proportional-split, egalitarian and Nash bargaining solutions of bargaining games, and usage based cost-sharing). We show that the SPoA for equal-split, proportional-split, and usage based cost-sharing (under certain conditions) is $\Theta(\log K)$, whereas the one for egalitarian and Nash bargaining solutions is $O(\sqrt{K} \log K)$. Therefore, distributed decision-making processes under common fair cost-sharing mechanisms induce only moderate inefficiency.Comment: Abridged version of this paper appears in IEEE Transactions on Control of Network System

The Uncontrolled Social Utility Hypothesis Revisited

The experiment disentangles communication and social effect in face−to−face communication. The results question the previous interpretation of communication effects in ultimatum bargaining, and suggest that separate processes, both of a strategic and of an affective−social nature induce cooperative outcomes.