Private Negotiations Research Articles

The Seesaw Effect: How Unregulated Negotiations Undermine Regulated Prices in the Market for Music Streaming

Spotify, Pandora, and other firms that stream copyrighted music must acquire a variety of copyright permissions in order to legally stream even a single song. Federal law regulates the price charged for some of those necessary licenses, but other equally necessary licenses are sold in the unregulated market. This causes a seesaw effect where government efforts to raise or lower rates are blunted, or even fully reversed, by responsive private negotiations. In essence, in the hope of achieving one or another policy aim, the government dramatically orders a reduction in the price of right shoes, only to see the unregulated price of left shoes move correspondingly higher in return. In this Article, I consider the degree to which this largely ignored seesaw undermines the public policy stories that scholars, government officials, and industry stakeholders tell about the regulation of music streaming. Those stories turn out to be significantly incomplete, because the regulatory infrastructure is likewise significantly incomplete.

Austen Chamberlain and the Locarno Treaties revisited

ABSTRACT The approaching centenary of the Locarno conference in October 1925 provides a convenient reason to re-evaluate the significance of the treaties that emerged from it. Often styled as the ‘real’ peace settlement at the end of the First World War, the treaties of Locarno collectively represent one of the most important attempts to ensure lasting peace in Europe in the first half of the twentieth century. Central to the treaties’ reputation as the ‘real’ peace settlement is their role in rehabilitating Germany’s Great Powers status after the humiliation suffered at the Paris Peace Conference six years earlier. The Locarno agreements have been seen as one of the rare highpoints in post-First World War Western European diplomacy. They were viewed by contemporaries as a real diplomatic breakthrough that would allow finally for the ghosts of the enmities that had caused the First World War to be laid to rest, although subsequent generations of scholars have been much more critical about what the agreements achieved in the long-term. This article focuses on the contribution made to the conference by the head of the British delegation, the Foreign Secretary, Sir Austen Chamberlain. It re-examines his diplomatic priorities, especially his reputation as a Francophile. Its central thesis is that Chamberlain himself can be seen to embody the essential reasons why the Locarno agreements were heralded as a success at the time of their conclusion, but less so with the perspective of hindsight. The treaties contained within them two opposing diplomatic forces. On the one hand, the remnants of the pre-war national state system, with its emphasis on diplomatic self-interest, secret, private negotiations, versus the so-called ‘new’ diplomacy: international, open, democratic and accountable. This rendered most of the European diplomatic problems in the post-First World War era intractable; indeed that they were incapable of resolution by anyone. Chamberlain’s entire engagement with the western European security question during the mid-1920s can be seen as evidence not only of those tensions but of the futility of trying to resolve them.

From Disappearance to Rebirth Politics and Business in Mantua Between 1630 and 1650

Until 1630, the population of Mantua was about 30,000 inhabitants and its economy was really sturdy, thanks to agriculture and some manufacturing activities. The war and its overwhelming effects were added to the ones of the humongous plague epidemic. In 1631, the city counted less than 7,000 inhabitants and each economic activity was absent. Thus the new dukedom’s government tried to boost both the population and the economic growth by guaranteeing tax exemptions for those people who chose to move to Mantua. This paper analyzes the stories of these entrepreneurs, who took advantage of the incentives, making private negotiations with the new government. The outcome was kind of surprising because the demographic growth was really fast, in 1640 already, the city was back to 25,000 inhabitants, but mostly the economic recovery was focused on new areas, such as stockings and caps factories and paper industry. The Plague and the war erased a city but a new one arose in its place, followed by a new ruling class and new economic basis.

When Do Boards of Directors Contribute to Shareholder Value in Firms Targeted for Acquisition? A Group Information-Processing Perspective

We draw on group information-processing theory to investigate how target boards of directors may contribute to target value capture during the private negotiations phase in acquisitions. We view target boards as information-processing groups and private negotiations as information-processing tasks. We argue that target board meeting frequency is associated with increased processing—gathering, sharing, and analyzing—of acquisition-related information, which improves target bargaining and, ultimately, target value capture. We further posit that this value-enhancing effect of target board meeting frequency is more pronounced when target board composition improves the ability of target boards to process acquisition-related information. Finally, we expect that meeting frequency is more consequential for target bargaining and value capture when acquisition complexity imposes high information-processing demands on the target boards during private negotiations. Empirical evidence from a sample of acquisitions of publicly listed firms in the United States offers support for our group information-processing perspective on board contribution to shareholder value in firms targeted for acquisition. Funding: This work was supported by the Strategy Research Foundation [Dissertation Grant SRF-2015DP-0016]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1643 .

Firm Behavior Under Conditions of Final Offer Arbitration: An Empirical Analysis of Major League Baseball’s Salary Negotiation Structure

Abstract: This paper explores the use of final offer interest arbitration (FOA) in Major League Baseball (MLB) and whether arbitrated salaries differ meaningfully from private settlements. MLB provides an excellent environment to analyze FOA because it is common practice for eligible players and their teams to announce official intended arbitration figures well in advance of hearings but ultimately privately negotiate a contract in the interim. This allows for consideration of the bounded arbitrated salary environment even when a hearing is avoided. Results reaffirm the findings of Burgess and Marburger (1993), which suggested that arbitrated salaries are of “low quality” in that the distribution range is wider for arbitration compared to private negotiation. Second, this paper contributes to existing literature by expanding analysis to including quantile regression, which indicates that not only is contract length positively correlated with players’ salaries but also statistically significant differences in this effect exist throughout the distribution.

Rebating Antitrust Fines to Encourage Private Damages Negotiations

Abstract To encourage private negotiations for damages in antitrust cases some jurisdictions subtract a fraction of the redress from the fine. We analyze the effectiveness of this policy. Such a rebate does not encourage settlement negotiations that would otherwise not occur. If, however, the parties settle without the rebate, the introduction of the reduction may increase the settlement amount. Yet, deterrence for those wrongdoers who are actually fined always goes down. Under a leniency program, the rebate does not affect the leniency applicant: she does not pay a fine that can be reduced. The overall effect of a fine reduction on deterrence is therefore negative.

Wage-Earning Slaves: Coartación in Nineteenth-Century Cuba

Wage-Earning Slaves: Coartación in Nineteenth-Century Cuba

Bilateral Contracting and Price-Based Demand Response in Multi-Agent Electricity Markets: A Study on Time-of-Use Tariffs

Electrical energy can be traded in liberalized organized markets or by negotiating private bilateral contracts. Competitive markets are central systems where market players can purchase and sell electrical energy. Bilateral contracting consists typically in a private negotiation of power over several months or years between two parties. Price-based demand response considers the active participation of consumers in electricity markets. Consumers adopt demand response programs when responding to market prices or tariffs, as they change over time. Those tariffs can be proposed by retailers by considering their load shape goals, influencing consumers to change their behavior. Consumers may adopt strategies from two different groups, namely by curtailing energy at times of high prices (e.g., peak and intermediate periods) and rescheduling energy away from those times to other times (shifting). This article considers bilateral contracting in electricity markets with demand response. It investigates how curtailment and shifting affect the energy quantity and energy cost of consumers that adopt a time-of-use tariff involving three block periods (i.e., base, intermediate and peak periods). The results indicate that consumers respond to changes in energy price according to their consumption flexibility, while retailers do not always change energy price in response to consumers’ efforts to change their consumption patterns. On average, by considering a 5% consumption reduction in the intermediate and peak periods by a consumer agent, a retailer agent reduces the energy price only by 1.5%.

The Study of Apology in Public Relation Crisis Management: how to Achieve the Mitigated Outcomes by Deploying Effective Apologies

Public Relations and crisis management, asnewly risen and rapidly growing domains, now serves as vital knowledge used to build healthy and robust two-way communication between customers and brands/organizations. Many methods are examined and tested to regulate organizational reputation and hold together customers’ trust and satisfaction as an unpredicted crisis that could damage positive brand image occurs. Recent studies reveal that to manage the crisis effectively, there are several strategies deemed effective; one example is the successful delivery of an apology. Two case studies: the 2022 Sesame PlaceRacialDiscrimination Case and the 2019 NetEase’s Justice Online 4.28 event, will be integrated as support for the study. This study explores in what tone, contents and timing an apology would be seen as practical and generates a brief model of strategies leading to an effective apology that could be applied in the post-crisis period. Strategies like denial, avoidance, and giving excuses that have led to negative results will also be put into a detailed discussion. By analyzing two case studies, a model with three steps that might be generally applicable is drawn in three steps 1. Immediate apology for the harm caused with investigation promised 2. Form a specialized PR team to build one-on-one connections and 3. Establish or enhance private negotiation in reaching agreements.

Can the French development tax be a strategic land value capture instrument?

This article analyses how local governments can use a land value capture instrument to support their land development and planning policy in addition to their financial objectives, focusing on the French ‘development tax’ in a real-estate development project in Bordeaux. It compares the legal framework of the development tax with the practice of public and private negotiation. The case study concludes that tax decisions leave unforeseen room for trade-offs between fiscal objectives and the business models of private developers via adjustments to the tax rate, building rights and facilities planning. The tax decision can help drive socio-spatial development and generate collective benefits.

The Development of the Takeover Auction Process: The Evolution of Property Rights in the Modern Wild West

Using a unique, hand-collected sample of US acquisitions, we study the interaction between the legal system and the takeover auction process from 1981 to 2020. We associate the strengthening of the property rights of targets’ boards after the 1989 Time Inc. decision with fundamental changes in the takeover auction process. This strengthening of the boards’ property rights has moved the auction process from a public one to a behind-the-scenes one in which targets’ boards control both the number of bidders and the flow of information. Targets’ boards are more likely to initiate the auction themselves, and the length of the private negotiation process has significantly lengthened. This fundamental change has benefited target shareholders.

Women social entrepreneurs in a Muslim society: how to manage patriarchy and spouses

PurposeThis study aims to investigate how women social entrepreneurs in Indonesia use various behaviors to address challenges to their leadership authority created by socioreligious patriarchal norms in this Muslim society.Design/methodology/approachAn exploratory study of six Muslim women social entrepreneurs was conducted using multiround, semistructured interviews in a contrast sample of three women who work with their husbands and three women who work without their husband’s involvement.FindingsThe study identifies a variety of leadership behaviors that women entrepreneurs use to mitigate the constraining impact of strong patriarchal religious gender norms. Observations revealed surprisingly effective micro adjustments often based on relationship-specific private negotiations between the entrepreneurs and their husbands.Research limitations/implicationsFuture research focused on the husbands’ perspectives and behaviors, as well as extensions to other patriarchal religions and societies, are encouraged.Practical implicationsRecognition of the crucial role of spousal relationships suggests the need for more holistic approaches to support women social entrepreneurship, e.g. by integrating husbands into related outreach programs.Social implicationsReligious gender stereotypes such as the stronger altruistic orientation of women can help counteract, to a degree, Muslim patriarchal norms when women lead social enterprises. Leadership of social enterprises by women promises to promote more gender equality over time, even if associated private and relationship-specific accommodations are not intended to challenge religious gender norms.Originality/valueThis study contributes to emerging research on the crucial role of spousal relationships for women’s entrepreneurship and the impact of private micro arrangements between spouses to mitigate the constraining impact of Muslim gender norms. Muslim women entrepreneurs approved of the religious gender norms that constrained them, in contrast to the more “feminist” perspectives common in women entrepreneurs in more secular and Christianity-dominated western societies.

Public Auction versus Private Negotiation in Residential Property Sales

The U.S. residential real estate market is unlike international markets of Australia, Singapore, and New Zealand, where public auctions are common or even preferred by property sellers, particularly for new homes. In these foreign markets, excess demand and supply shortages drive sale price premiums for auctioned properties. We use residential property sales for 2000-2017 from Montgomery, Alabama, to investigate latent differences between sale prices for properties selling at public auction versus sale prices resulting from privately negotiated transactions closed by real estate agents who report results to their regional multiple listing service. Of the residential properties in our sample, only 0.6 percent sold via auction, and there were no sales of newly constructed homes. Properties sold by auction demonstrate reduced information asymmetry and improved pricing accuracy; however, these properties tend to be in the lower price range, older, lower quality, previously on the market for a more significant amount of time, and those selling at lower prices. In addition to using other econometric methods, we incorporate a factor analysis, a method not often used in real estate research but well suited to our study. New homes sold via private negotiation show the highest orthogonal factor loading. At the same time, our demand and bank-owned property variables have higher factor loadings for publicly auctioned properties. Our conclusions persist even after removing foreclosed properties from the analysis.

Taxes and Takeovers: Evidence from Private Negotiations During Tax Reform

Taxes and Takeovers: Evidence from Private Negotiations During Tax Reform

Fisheries Cooperatives as a Platform to Address Multi-stakeholder Issues in South Sri Lanka: Incorporating SSF Voluntary Guidelines into the ICZM Process

Coastal resources are used by multiple stakeholders with diverse interests, whose actions often give rise to conflicts, showing the need for integrated coastal management where resource use decisions are made with the participation of all. While all relevant state actors operate along the coastal belt, there hardly exists any coordination among them, revealing the absence of integrated efforts in coastal resource management. This study was undertaken in this context, aiming at finding out the potential lead role, a community based organisation could play in initiating an integrated coastal management platform. Since the recently developed SSF Guidelines have important implications for such a platform, the study examined the extent to which fisheries cooperatives qualify for such a task. Rekawa of Southern Sri Lanka was selected for the study. The methodology involved a Focus Group Discussion with representatives of all coastal resource users, and a questionnaire survey. Results revealed that, conflicts among stakeholders were pervasive but remained latent. They have been resolved mainly through private negotiations. Among the three community organisations in operation, the marine fisheries cooperative ranked first in respect of providing livelihood capitals and, in its potential to adopt key concerns highlighted in SSF guidelines, but ranked low in resource management. Holistic, integrated, inclusive approaches to management with the participation of all relevant parties and, improving the socio-economic conditions, were accredited as the most pertinent SSF guidelines towards conflict resolution. The study showed that fisheries cooperatives could play an important role in the process of integrated coastal zone management, providing a formidable platform to address multiple stakeholder issues.

Responsible Fiscal Policy and Economic Development: A Challenge for Latin America After COVID-19

The COVID-19 pandemic has made it evident that the deep global economic-financial crisis of 2007–2009 has not been overcome. Instability and uncertainty have reached extreme levels in all public and private spheres, demanding to revolutionize the economic structure, promote innovation in methods to manage production, generate originality in the social and institutional organization of the State and to accelerate the advent of new energy sources to promote in unprecedented ways the relationship between human beings and nature. In recent years and during the pandemic, in Latin American economies, unemployment, underemployment and informal employment, public debt, and inflation rates have increased, while the real income of governments fell. This situation is accompanied by persistent operating account deficits, public and private debt negotiations, high interest rates, periods of stability or appreciation in the exchange rate, volatility of foreign capital flows and flight of national capital; all being favorable elements for the mainstream policy based on fiscal discipline. In a post-pandemic stage, during which income concentration accelerates and the prices of basic necessities such as food and medicines increase, the planned government deficit, taking into account the heterogeneity among countries in the region, could avoid another lost decade with a multiplier effect on socio-economic development.

Gender diversity on corporate boards: Evaluating the effectiveness of shareholder activism

In this paper, we examine the effectiveness of shareholder activism as a change mechanism for improving gender diversity on corporate boards. We provide evidence that shareholders use both internal pressure through private negotiations that lead to a withdrawn proposal, and external pressure by submitting a proposal to vote in the annual shareholders’ meeting to draw public attention. While both are impactful, we find that improvement in board gender diversity is more responsive to private negotiations than to social pressure. We also find that shareholders’ votes in favor of diversity proposals are higher when a board is less diverse; but it’s the very existence of a proposal that matters and not how many votes it receives. Finally, we find that proposals sponsored by institutional investors are more effective in bringing gender diversity to corporate boards.

Measuring Competition in M&A Negotiations

This paper provides novel insights about competition among bidders during the whole takeover process, its effect on offered deal premiums, bidder announcement returns, and post-bid dynamics. Exploiting a representative sample of 780 public U.S. transactions, extended with comprehensive hand-collected data from SEC filings, I find that takeover premiums are higher, the higher pre-announcement competition among bidders is. I measure competition during the private sales process with a ratio that relates the number of bids submitted to the target to the number of signed confidentiality agreements with the target, the Proposals-to-CA-Ratio. A one-standard deviation increase of this ratio corresponds to a statistically and economically significant 5.99% increase of the deal initiation premium (Eaton, Liu, and Officer (2020)), 0.87% lower announcement returns for the winning bidder in auctions, a 130% increased probability of receiving a rival bid prior to closing, and a 44.5% increased probability of cancelling the originally announced deal (measured relative to the unconditional probability). The latter two results are more pronounced if the announcement returns of the acquirer are positive, suggesting that competing bidders are lured by potentially value-increasing deals. By applying Heckman (1979) two-stage selection models with instrumented regressors, I show that my results are robust to endogeneity concerns, especially to target’s decision to initiate the deal as well as the decision of the subsequent selling procedure (auction vs. one-to-one negotiation). The advantages of this competition measure are that (1) it relies on data as reported in target firm’s official merger documents filed with the SEC, which creates a strong incentive to report truthfully, and (2) it takes the evolution of bidding into account, controlling for the number of submitted bids. I conclude that competitive private negotiations stay competitive during the public phase of the deal, and that target boards fulfill their fiduciary duties by selecting the highest-bidding acquirer.

AUTOMATED NEGOTIATION BASED ON ENSEMBLE LEARNING AND OPTIMAL COUNTER PROPOSAL

Agent-mediated automated negotiation is a key form of interaction in the e-commerce environment. Agents reach an agreement through an iterative process of making offers. However, agents are prone to conceal their private negotiation information, which decreases the efficiency of negotiation. In this paper, an ensemble learning-based negotiation method is proposed. The new method labels the proposals automatically by mining the implicit information in negotiation history data. Then, the labeled proposals become the training samples of the ensemble learning algorithm, which generates the estimation of the opponent’s utility function. At last, based on the utility function of both sides, a win-win negotiation counter-proposal is generated through a particle swarm optimization algorithm. The experimental results indicate the benefits and efficiency of the proposed method.

Multi-Agent Reinforcement Learning Approach for Residential Microgrid Energy Scheduling

Residential microgrid is widely considered as a new paradigm of the home energy management system. The complexity of Microgrid Energy Scheduling (MES) is increasing with the integration of Electric Vehicles (EVs) and Renewable Generations (RGs). Moreover, it is challenging to determine optimal scheduling strategies to guarantee the efficiency of the microgrid market and to balance all market participants’ benefits. In this paper, a Multi-Agent Reinforcement Learning (MARL) approach for residential MES is proposed to promote the autonomy and fairness of microgrid market operation. First, a multi-agent based residential microgrid model including Vehicle-to-Grid (V2G) and RGs is constructed and an auction-based microgrid market is built. Then, distinguish from Single-Agent Reinforcement Learning (SARL), MARL can achieve distributed autonomous learning for each agent and realize the equilibrium of all agents’ benefits, therefore, we formulate an equilibrium-based MARL framework according to each participant’ market orientation. Finally, to guarantee the fairness and privacy of the MARL process, we proposed an improved optimal Equilibrium Selection-MARL (ES-MARL) algorithm based on two mechanisms, private negotiation and maximum average reward. Simulation results demonstrate the overall performance and efficiency of proposed MARL are superior to that of SARL. Besides, it is verified that the improved ES-MARL can get higher average profit to balance all agents.