Bargaining Contracts Research Articles

Gender Differences in Intra-Household Efficiency: Evidence from an Investment Game Between Spouses in India

In this paper, I test for gender differences in intra-household allocative efficiency through a laboratory experiment with established married couples in India. The experiment presents the couple with the opportunity to earn 50 per cent of daily household expenditure. Spouses played an investment game where one spouse was randomly assigned to the role of sender and the other to receiver. The setting of the game is unique in several ways. There is perfect information over strategies, actions, and final payoffs. Second mover spouses can react to the first movers’ actions, which is rare in intra-household experiments. The unitary and cooperative models of the household are rejected as only 5 per cent of men and 2 per cent of women in the sender role play the household earnings maximising strategy. Women send significantly less money than their male counterparts. Women (senders) who keep more money are those in households where husbands’ tobacco consumption is largest costing households the equivalent of 30 per cent of daily household expenditure. The results indicate that households operate under non-cooperative bargaining contracts where women are willing to incur costs to maintain control over money.

Socially responsible investment: Ex-ante contracting or ex-post bargaining?

This paper shows how a socially and environmentally aware firm principal can motivate a profit-oriented manager to pursue positive environmental, social, and governance (ESG) outcomes. In the model, the manager produces a verifiable output that creates social costs but also engages in an unverifiable output that promotes ESG. The paper demonstrates that an ex-post bargaining contract is preferred to an ex-ante commitment contract if the unverifiable output substantially improves ESG or if there exist substantial social costs. The paper also examines how social impact bonds can be more effective than short-term debt when used to finance social programs.

Labor Unions and the Problem of Monopoly: Collective Bargaining and Market Governance, 1890 to the Present

The labor movement has long had an ambivalent relationship to antitrust policy in the United States. Trade unionists have considered concentrated markets to be more favorable environments for union power than decentralized markets: oligopoly demands fewer union resources for organizing and contract bargaining campaigns, and oligopolists can tame cutthroat competition and share product market rents with workers. This article takes a different view. Looking to the strategies employed by unions in decentralized industries, where unions rather than corporations took on the role of taming and regulating competition, it explains how unions have leveraged power over market governance into bargaining power over wages and working conditions. In the current age of vertical disintegration and fissured workplaces, union power over market governance is more important to shop-floor power than ever. Antitrust policy is one tool that can help restrain the power of corporations and make them more accountable to workers’ collective power.

Electricity Quality Emergency Investment with a Bargaining Contract in the Electricity Supply Chain under the COVID-19 Pandemic

ABSTRACT This paper explores the decentralized, centralized and bargaining models of a supply chain involving an electricity generator and a retailer. We found that the investment cost coefficient negatively impacts the supply chain profits but positively affects price decisions. In contrast, the probability of meeting the COVID-19 emergency positively impacts the supply chain profit and negatively affects price decisions. We contribute by designing a bargaining contract for energy supply chain firms to improve profits on low investment, thereby improving their financial health and competitive advantage. The results imply that financial managers can bridge the revenue gap in COVI9 19 period.

Green Supply Chain Coordination During the COVID-19 Pandemic Based on Consignment Contract

COVID-19 has further strengthened consumers’ online consumption habits and brought a new boom in which enterprises can use online transactions and green products to avoid risk and gain profits in the pandemic. A green supply chain model is established containing one e-commerce platform and one manufacturer. The Nash bargaining contract and Rubinstein bargaining contract are applied to mitigate conflicts of profits in the model. From the coordination analysis, we show that both Nash and Rubinstein bargaining contracts can achieve coordination and mitigate conflict of profits through the adjustment of platform usage rates. According to each member’s bargaining power and patience, the optimal platform usage rate is determined, the supply chain profits of both sides are allocated, the green production’s research and development are promoted, and a win-win situation is realized. Specifically, in the Nash bargaining contract, the excess profit of each member depends on their bargaining power. The stronger the bargaining power, the more excess profits will go to the e-commerce platform, and the less excess profits will go to the manufacturer. In the Rubinstein bargaining contract, the excess profit of each member depends on the lowest profit bound and bargaining patience. The higher the manufacturer’s (or e-commerce platform’s) patience, the higher his profit. When the patience of both is high (or low), the e-commerce platform (or the manufacturer) plays a leading role and obtains more profits.

Downstream Mixed Duopoly, Vertical Bargaining Contract and Endogenous Choice of Competition Modes

Downstream Mixed Duopoly, Vertical Bargaining Contract and Endogenous Choice of Competition Modes

Response to Bogg and Ewing, ‘Collective Bargaining and Individual Contracts in Kostal UK Ltd v Dunkley A Wilson and Palmer for the Twenty-First Century’

Response to Bogg and Ewing, ‘Collective Bargaining and Individual Contracts in <i>Kostal UK Ltd v Dunkley</i> A <i>Wilson and Palmer</i> for the Twenty-First Century’

Wage Differentials, Bargaining Protocols, and Trade Unionism in Mid-Twentieth-Century American Labor Markets

Income inequality in the United States has been lower in periods when trade unionism has been strong. Using observations on wages by occupation, by geography, and by gender in collective bargaining contracts from the 1940s to the 1970s, patterns in movements of wage differentials are revealed. As wages increased, some contracts maintained relative wage differentials constant, some maintained absolute differences in wages constant, others combined these two patterns, and some did not reveal an obvious pattern. The patterns persisted even as price inflation increased in the 1970s. The dominant pattern implies a reduction in inequality as usually measured.

NLRB Directs Dismissal of McDonald's Joint‐Employer Case

Recently, the National Labor Relations Board has been on a fast‐paced program to continue undoing decisions from the Obama‐era Board that employers view as pro‐labor. One of the most important was the dismissal of a long‐standing effort by labor to make McDonald's liable for any unfair labor practices by its franchisees. Another new case concerned collection of union dues after a bargaining contract expires. The Board also changed the rules on whether employers may lawfully forbid employees from discussing confidential workplace investigations. In addition, the Board has made new rules on whether employers must permit employees to use their employer's company email for union organizing.

Wage Differentials, Bargaining Protocols, and Trade Unionism in Mid-Twentieth Century American Labor Markets

Income inequality has been lower in periods when trade unionism has been strong. Using observations on wages by occupation, by geography, and by gender in collective bargaining contracts from the 1940s to the 1970s, patterns in movements of wage differentials are revealed. As wages increased, some contracts maintained relative wage differentials constant, some maintained absolute differences in wages constant, others combined these two patterns, and some did not reveal an obvious pattern. The patterns persisted even as price inflation increased in the 1970s. The dominant pattern implies a reduction in inequality as usually measured.

Do Firms Leave Workers in the Dark Before Wage Negotiations?

This paper examines managers' strategic use of financial disclosure in labor negotiations. Using the exogenous expiration date of collective bargaining contracts, I find that when wage negotiations are imminent, firms strategically redact information about material agreements. Strategic redaction is pronounced when unions cannot accurately predict firms' prospects, when firms have low growth opportunities, when liquidity is less constrained, and when the estimated cost of a work stoppage is low. These results suggest that firms strategically withhold information to balance the costs and benefits of information asymmetry. Consistent with this interpretation, strategic disclosure is statistically uncorrelated to ex post performance.

Teacher Unionization and Student Academic Performance: Looking beyond Collective Bargaining

This paper investigates the relationship between teachers unions and students’ academic performance. We examine nationally representative data and use a more comprehensive measure of teacher unionization by identifying both districts with collective bargaining contracts and districts with meet-and-confer agreements. We find that teachers unions raise student test scores via both channels. This positive relationship is stronger for black students than for white students and for lower grade than upper grade levels.

Channel coordination of a two-echelon sustainable supply chain with a fair-minded retailer under cap-and-trade regulation

Abstract With the growing level of public environmental consciousness, sustainability has become an important issue in the area of supply chain management. This paper focuses on a channel coordination problem in a two-echelon sustainable supply chain involving one socially responsible manufacturer and one fair-minded retailer. Constructing mathematical models to characterize the problem, four particular contracts are developed to investigate the environmental performance and channel profit under the framework of two non-cooperative contracts: wholesale price and two-part tariff, and two cooperative contracts: Nash bargaining and Rubinstein bargaining. Theoretical analysis verified by numerical experiments shows that the wholesale price contract performs worse than the other three in terms of the carbon emission per unit product and channel profit. In addition, the two-part tariff contract can partially coordinate the supply chain, whereas both bargaining contracts can achieve perfect coordination to provide outcomes of the centralized decision. Comparing with the fair-neutral scenarios, we find that the fairness behavior promotes the retailer’s profit, but reduces the manufacturer’s profit under different contracts. Sensitivity analysis reveals that with intensified fairness concerns, the sustainability level and channel profit diminish under non-cooperative contracts, but remain the same under cooperative contracts. The Nash bargaining and Rubinstein bargaining contracts are robust to the degree of the retailer’s fairness behavior and could be the best choice for the socially responsible manufacturer.

Third-Party Intervention and the Preservation of Bargaining Relationships

This article uses longitudinal bargaining contract data to examine whether third-party dispute resolution procedures improve the health of bargaining relationships and contribute to their preservation. The author uses survival analysis to assess whether the procedures correlate with the likelihood of relationship dissolution. This analysis shows that earlier procedures in the dispute resolution process, such as conciliation and mediation, are related to a lower likelihood of dissolution than are later ones. The author then uses dynamic panel models to consider whether third-party intervention pushes the parties to settle subsequent collective agreements voluntarily or earlier in the process, but he finds no evidence to this effect.

The Impact of Teachers Unions on Teachers’ Well-Being Under Various Legal Institutions: Evidence From District–Teacher Matched Data

This article examines how teachers unions affect teachers’ well-being under various legal institutions. Using a district–teacher matched data set, this study identifies the union effects by three approaches. First, I contrast teacher outcomes across different state laws toward unions. Second, I compare the union–nonunion differentials within the same legal environment, using multilevel models and propensity score matching. Finally, unexpected legal changes restricting the collective bargaining of teachers in four states form a natural experiment, allowing me to use the difference-in-difference estimation to identify the causal effect of weakening unionism on teacher outcomes. I find that (a) many teachers join unions even when bargaining is rarely or never available, and meet-and-confer or union membership rate affects teachers’ lives in the absence of a bargaining contract; (b) how unions influence teacher outcomes vary greatly by different legal environment; and (c) the changes in public policy limiting teachers’ bargaining rights significantly decrease teacher compensation.

Quality risk in logistics outsourcing: A fourth party logistics perspective

We investigate an outsourcing logistics risk management problem under a principal-agency framework. A fourth-party logistics firm (4PL) deputes a third-party logistics firm (3PL) to complete the tasks received from clients. The 4PL cannot observe the effort/investment level of the 3PL on the delivery quality but only on the ex post delivery quality. Thus, a contract based on delivery quality is proposed to stimulate the 3PL to exert optimal effort/investment for the outsourced task. First, we derive the optimal contract contents both in symmetric and asymmetric information settings and show that in the asymmetric information setting, although a menu of contracts can induce the 3PL to tell the truth, asymmetric efficiency information can lead to a drop in delivery quality as well as in system-wide welfare. Then, to deal with this issue in the asymmetric information setting, we introduce two contracts: noncooperative bargaining and cooperative bargaining contracts. We find that the cooperative bargaining contract can ensure the 3PL exerts the maximum effort/investment level and achieves high-quality delivery and system-wide welfare. Finally, we extend our study to a case with discrete efficiency distribution and analyze various types of contracts as well as their implications.

The Rise in Orientation at Collective Bargaining Without a Formal Contract

While firm participation in collective bargaining between unions and employers’ associations has been decreasing in Germany over the last two decades, orientation at collectively bargained wages has increased in popularity. Orientation implies that employers claim to set wages according to collective agreements but they are not formally bound by the respective bargaining contract, and in fact, I observe that they pay significantly lower wages than firms that are formally covered. Dynamic nonlinear panel estimation applied to establishment‐level data shows that this orientation is a stepping stone into formal participation. However, the decline in formal participation and the opposing rise in orientation are mostly due to a changing establishment composition rather than to behavioral transitions.

Vertical Arrangements and Upstream Mergers

We study the incentives for horizontal upstream mergers in a quantity-setting vertically related industry, under bargain and endogenous contract types. We show that the contract types used could have important consequences for the equilibrium market structure and vice versa. If it is the retailers who choose contract types, they share the same preferences as the policymakers and choose to offer two-part tariff contracts, leading the suppliers not to merge. This result has some obvious policy implications. If it is the suppliers who decide contract types, they prefer to merge and offer a partial forward vertical ownership scheme. Under Bertrand competition, there is always an upstream merger, but the common manufacturer will offer a two-part tariff contract for intermediate bargain power levels. For high bargain power levels, he will choose a partial forward vertical ownership scheme, while for low bargain power will suffer from negative profits. A policymaker, considering the maximization of the social welfare should consider the upstream merger and two-part tariff contracts.

Collective bargaining coverage, works councils and the new German minimum wage

This article assesses the role of the recent introduction of the minimum wage for collective bargaining coverage and works councils in Germany. The new minimum wage was initiated to strengthen German tariff autonomy, but effects on collective bargaining coverage are theoretically ambivalent. Using the IAB Establishment Panel, descriptive regressions show that firms covered by a collective bargaining contract are much less likely affected by the minimum wage. To construct a counterfactual for the group of affected establishments, the authors apply an entropy balancing procedure. Subsequent difference-in-differences estimates reveal a slight decline in collective bargaining participation, which falls short of statistical significance. Although the effect on opting into collective bargaining is even slightly positive, the authors observe a significant decrease in coverage through firms that exit collective agreements.

Knocking on Labor's Door: Union Organizing in the 1970s and the Roots of a New Economic Divide by Lane Windham

Reviewed by: Knocking on Labor's Door: Union Organizing in the 1970s and the Roots of a New Economic Divideby Lane Windham Lane Windham Knocking on Labor's Door: Union Organizing in the 1970s and the Roots of a New Economic Divide. By Lane Windham. Justice, Power, and Politics. (Chapel Hill: University of North Carolina Press, 2017. Pp. [xiv], 295. $32.95, ISBN 978-1-4696-3207-0.) Lane Windham's Knocking on Labor's Door: Union Organizing in the 1970s and the Roots of a New Economic Divideadds fuel to labor historians' current debate about the 1970s. On one side stand pessimists who depict the [End Page 1062]1970s as a decade of "working-class backlash and defeat," when complacent union bureaucrats neglected organizing activity and collective class concerns gave way to an individualized "rights consciousness" (pp. 3, 6). On the other side stand optimists such as Windham who declare that the 1970s actually witnessed "a wave of millions of workers who attempted to organize unions in the private sector" (p. 2). This union resurgence was spurred by "a transformed working class," consisting of "men of color, women of all backgrounds, and young baby boomers just entering the workforce" (pp. 3, 2). Furthermore, the rights consciousness that emerged from the civil rights and feminist movements contributed to the labor upsurge through such legislation as Title VII of the 1964 Civil Rights Act, which allowed women and people of color access to higher-paying union jobs. When coupled with the vast expansion of public-sector unions, the "tremendous organizing efforts" of the 1970s make the decade appear less like a descent into labor's dark age and more like its last golden age (p. 3). The book's title refers to Windham's contention that, for working-class Americans, unions represented the "door" to higher wages and the enhanced social welfare provisions that were available only through collective bargaining contracts. But while an unprecedented number of workers "knocked on labor's door" through participation in National Labor Relations Board (NLRB) elections, many of them failed to gain entry. In the book's first half, Windham shows that the union insurgency was halted in the early 1980s, not by union officials' incompetence or a conservative political culture, but by a cunningly effective employer counteroffensive. Here, Windham deftly synthesizes a wealth of primary and secondary sources to make a compelling case. Faced with global competition and sluggish productivity, employers slashed costs by undercutting unions and lobbying against labor law reforms while hiring union-busting consulting firms that specialized in sophisticated union avoidance strategies. When the dust settled in the late 1980s, union density had dropped by a full 10 percentage points and the number of NLRB elections had plummeted. Organized labor has never recovered from this management offensive, and working-class Americans, lacking union power, now struggle with declining wages and increasing economic precariousness. The book's heart, though, is found in its second half, a series of case studies of union organizing drives, based on Windham's interviews with rank-and-file activists. Windham's implication is that the 1970s union insurgency offers lessons for present-day workers, especially in the retail and service sectors. In Boston, for example, feminists and antiwar activists formed 9to5, a nontraditional "association" of clerical workers that Windham sees as a forerunner of today's "alt-labor" organizations, which may provide the model for successful labor movements in the future (pp. 152, 153). She also shows that even amid the rise of the conservative Sun Belt South, it was women and people of color who stood at the forefront of union drives at industrial workplaces, such as the Newport News, Virginia, shipyards and the Kannapolis, North Carolina, textile mills. On one level, Knocking on Labor's Dooris a conventional work of labor history—no surprise given that Windham is a former union organizer with seventeen years of experience who brings an insider's knowledge to bear on her [End Page 1063]subject. But on a broader level, the book marks yet another superb monograph from a fresh cohort of labor historians who challenge pessimistic narratives of organized labor's decline with inspiring studies...