Arbitration systems and negotiations

We consider a model of bargaining by concessions where agents can terminate negotiations by accepting the settlement of an arbitrator. The impact of pragmatic arbitrators—that enforce concessions that precede their appointment—is compared with that of arbitrators that act on principle—ignoring prior concessions. We show that while the impact of arbitration always depends on how costly that intervention is relative to direct negotiation, the range of scenarios for which it has an impact, and the precise effect of such impact, does change depending on the behavior—pragmatic or on principle—of the arbitrator. Moreover the requirement of mutual consent to appoint the arbitrator matters only when he is pragmatic. Efficiency and equilibrium are not aligned since agents sometimes reach negotiated agreements when an arbitrated settlement is more efficient and vice versa. What system of arbitration has the best performance depends on the arbitration and negotiation costs, and each can be optimal for plausible environments.      

Pendulum arbitration: a modest experiment

The annual round of the settlement of disputed transfer fees gave an opportunity for a modest attempt to access the impact of pendulum arbitration, Previous years had clearly indicated the centrifugal impact of arbitration. It appears that pendulum arbitration improves this but at the expense of one side: the club losing the player.     

对海峡两岸衡平仲裁制度的比较观察

文章从对海峡两岸的衡平仲裁制度的比较研究入手,找出各自的特色和不足,取长补短。严格的讲衡平仲裁制度在国际上是备受争议的。希望能够从比较研究的视角找出合理的利用办法,明晰争议的重点是如何在当事人意思自治和法律规范之间取得平衡。     

Bargaining power and the structure of salaries in major league Baseball

The relationship between bargaining power and the structure of salaries in major league baseball has been a subject of much empirical study. The evidence provided in this paper suggests that eligibility for final-offer arbitration does not result in a ‘fixed’ reduction in monopsonistic exploitation. Rather, the level of exploitation diminishes markedly in the first season of eligibility and continues to decrease in subsequent seasons. By the time the player reaches free agency eligibility, he can expect to earn the same single-season salary that he would as a free agent.     

Legal and Procedural Strategies for Employees Utilizing Arbitration for Statutory Disputes

This article § reviews the current United States law regarding arbitration of statutory disputes in the nonunion employment setting. The article is a literature review and offers no new research findings but rather focuses on the important legal and procedural strategies employees may use throughout the arbitration process. The article specifically advises the reader on selection of an attorney, selection of an arbitrator, selection of a third party administrator, the discovery process, and the requisite hearing procedure. Possible challenges to the arbitration process are also discussed. In addition, the article focuses on the advantages and disadvantages of arbitration from an employee's point of view.     

Templates for financial control? Management and employees under the private equity business model

The term ‘private equity business model’ (PEBM) refers to private equity investors that delist publicly quoted firms, managing them as private equity‐controlled portfolio firms. But how and in what form do these investors diffuse a preferred template for the PEBM in portfolio firms? Is diffusion codified, institutionalised or merely tacit? What is the difference between these forms of diffusion? As a method of financial control, how is diffusion evident for managers and workers? Theoretically, while ‘financialisation’ is a contemporary pressure on the British economy, there is a ‘disconnection’ between competitive pressures for financialisation and the diffusion of practices to manage these pressures in portfolio firms. Forty‐two interviews in eight portfolio firms and five associated private equity firms concludes that potentially transformative and decisive restructuring for managers and workers is more evident than a defined template.     

Sources of delay in grievance arbitration

This study investigates the sources of delay in the grievance arbitration process. Three delay components were examined: delay in proceeding to hearing, delay from hearing to written award, and overall delay. Multiple regression analyses showed that the arbitration hearing format (tripartite panels versus sole arbitrators), the use of legal counsel, and individual arbitrators themselves, were all significant sources of delay. Further, over the twelve-year period examined in this study, the average grievance arbitration case lengthened by about 7.9 days per annum.     

Arbitrators’ characteristics and decision-making records,gender of arbitrators and grievants,and the presence of legal counsel as predictors of arbitral outcomes

Labor arbitration helps define employee and employer rights and responsibilities. Evidence indicates that the advocates at arbitration tend to concern themselves with issues unrelated to the facts of the case or to the rights and responsibilities of the parties involved. More specifically, before the hearing, management and union advocates often dwell on issues such as the importance of the arbitrators’ personal characteristics and their decision-making history, the likely effects of the gender of arbitrators and grievants, and whether the presence of legal counsel impacts the arbitral outcomes. The purpose of this study is to examine whether these non-case-related factors actually can be associated with differing awards by arbitrators. This study may be the first in which the arbitrators’ decision-making history (award orientation) is a primary issue. Of all the issues studied, the arbitrator’s disciplinary award orientation is the only one with a consistent impact on arbitral outcomes. We conclude that the energy and resources expended by the advocates concerning non-case-related issues would be better spent in preparing their cases for arbitration and in examining the potential impact of arbitration on the rights and responsibilities of management and its employees.     

Managerial time constraints and young worker productivity: Natural experiments with NFL rookies

The 2011 National Football League lockout and movement of the 2014 draft to a later date compressed the off‐seasons preceding the 2011 and 2014 seasons, exogenously tightening time constraints within which managers—head coaches and their staffs—engage in short‐run training of players. We exploit these natural experiments to investigate how this impacted the productivity of young workers (National Football League rookies). Results estimated for a sample of over 1,500 rookies support hypotheses emanating from an economic model of worker training time allocation and indicate reduced productivity along several dimensions. Survival analysis shows evidence of shorter player career durations along certain lines, suggesting longer term consequences.     

Modern Pirates: How Arbitration Lawyers Help Corporations Seize National Assets and Limit State Autonomy

Large‐scale companies have worked for centuries with the governments of powerful nations to extract wealth from the rest of the world. Since the 1990s, one important method of continuing that legacy has been the use of secretive legal proceedings known as investor‐state dispute settlements (ISDS). Through this innocuous‐sounding practice, transnational corporations (TNCs) are able to blame foreign governments for their failure to extract as large a profit as they anticipated from their operations abroad. Asserting that changes in fiscal, environmental, or social policies have harmed them, TNCs have claimed that foreign governments should compensate them for the loss of potential revenues. ISDS tribunals have awarded billions of dollars as a result of such claims, mostly made under the auspices of bilateral investment treaties. Not only must governments spend millions of dollars defending themselves against assaults and tens or hundreds of millions if they lose their cases, but the ISDS system also has a chilling effect on the adoption of legislation designed to protect the health and safety of citizens. As a result of all the lawsuits in which corporations collect damages from governments under investment treaties, an array of groups in the legal industry have profited substantially: law firms representing corporate interests, arbitrators and other specialists in corporate arbitration, and litigation funders. The arbitration industry is, as a practical matter, the glue that holds the system together. The law firms involved in this industry do not wait passively for cases to arise. Instead, they actively pursue corporations to seek arbitration with governments, proselytize for the legitimacy of the current international investment regime, and block reforms that would limit arbitration opportunities. By creating methods of insulating TNCs from normal business risks and forcing host governments to bear the burden of liabilities, the arbitration system has effectively reinstituted a neo‐colonial regime through the judicial system.     

Eurozone equities expected to outperform in 2015

• We expect Eurozone equities to somewhat outperform US equities in 2015, so long as downside risks (such as a Greek exit from the Eurozone) do not materialise.
• Absolute valuation measures suggest that Eurozone stocks are fair‐to‐slightly cheap, limiting their upward potential. But relative to US stocks, they appear more attractive. This suggests potential for favourable portfolio reallocations and a possible lift to equity prices in the region.
• That said, earnings growth is likely to provide the main support to Eurozone equity performance in 2015, against a backdrop of converging earnings cycles between the US and the Eurozone.

     

Intrametropolitan planning for community-based residential care: a goals programming approach.

Small community-based residential facilities have increasingly supplanted large-scale institutions as treatment settings for mentally and physically disabled, indigent, elderly and ex-offender populations in the United States. Because the intrametropolitan assignment of these service-dependent populations and their community care facilities has not been purposively planned, most facilities and clients have clustered in inner cities, resulting in the formation of service-dependent population ghettos. This paper outlines a goals programming approach to the client/facility assignment problem. The model provides a basis for an intrametropolitan distribution of residential service facilities that balances equity and efficiency goals and that protects both client and community rights. A regional fair-share plan that incorporates negotiation and arbitration techniques is offered as an institutional mechanism for implementing the goals programming framework.     

Modelling employment durations of NHL head coaches: turnover and post‐succession performance

Match‐level National Hockey League (NHL) data are used to identify factors likely to trigger the departure of a team's coach, and to measure the short‐term impact on subsequent match results. There is a statistically significant link between individual match results and the job departure hazard for up to 15 games prior to the point of departure. The hazard depends on the team's current standing within its conference relative to a pre‐season forecast, recent performance in the Stanley Cup, the coach's age and previous employment with his present team as a player. After controlling for a mean‐reversion effect, teams that changed their coach within‐season are found to perform worse subsequently than those that did not, but the negative effect is short‐lived. Copyright © 2006 John Wiley & Sons, Ltd.     

The effects of mandatory employment arbitration systems on applicants' attraction to organizations

This study draws on organizational justice theory to investigate the effects of mandatory employment arbitration on organizational attraction. Specific attention is given to the characteristics of employment arbitration procedures that moderate the adverse effects these programs have on applicants' intentions to continue with the recruitment process. A total of 389 professional and executive MBA students read simulated employment brochures. Making employment arbitration mandatory was found to have a significant negative main effect on applicant attraction. This negative effect was mitigated when procedures afforded employees more due process considerations and when employees were given a just‐cause protection in return for giving up their right to sue. Finally, this negative effect was greater among minorities than nonminorities. © 2005 Wiley Periodicals, Inc.     

A pricing‐error rule on share distribution in equity joint ventures: The Bayesian approach

Equity joint ventures (EJVs) are a popular governance mode of inter‐firm cooperation that has attracted substantial research attention. The literature, however, still lacks a precise rule for the parents to follow in splitting the equity shares of an EJV, although share distribution is critical to almost all aspects of the co‐ownership relationship. In this study, we fill this literature gap by taking the Bayesian approach to draw a pricing‐error rule on share distribution in EJVs. More specifically, we contend that equity participation by two firms in an EJV allows profit sharing to correct for the errors that they might commit in pricing their inputs to the EJV. For profit sharing to fully nullify such pricing errors, the shares of an EJV must be split between the parent firms in a percentage combination that matches the relative sizes of their pricing errors. Because pricing errors are observable only afterward, share distribution in EJVs resembles a Bayesian process, in which the partners keep updating their estimates on pricing errors to adjust share distribution to a percentage combination that could best nullify their pricing errors. Thus, the eventual outcome of share adjustment is EJV buyout, in that the partner whose pricing errors remain substantial buys out the shares of the other whose pricing errors have become tolerable.     

Learning unethical practices from a co-worker: The peer effect of Jose Canseco

This paper examines the issue of whether workers learn productive skills from their co-workers, even if those skills are unethical. Specifically, we estimate whether Jose Canseco, a star baseball player in the late 1980's and 1990's, affected the performance of his teammates by introducing them to steroids. Using panel data, we show that a player's performance increases significantly after they played with Jose Canseco. After checking 30 comparable players from the same era, we find that no other baseball player produced a similar effect. Furthermore, the positive effect of Canseco disappears after 2003, the year that drug testing was implemented. These results suggest that workers not only learn productive skills from their co-workers, but sometimes those skills may derive from unethical practices. These findings may be relevant to many workplaces where competitive pressures create incentives to adopt unethical means to boost productivity and profits. Our analysis leads to several potential policy implications designed to reduce the spread of unethical behavior among workers.     

An arbitrator looks at grievance arbitration

This article is an overview of the major considerations that are crucial in the thought processes of an arbitrator in deciding a grievance-arbitration case. An arbitrator’s first obligation is to interpret and apply provisions of the labor agreement in a manner consistent with the intent of the parties. Past practices or precedents are often considered by arbitrators to assess the intent of the parties and to decide certain issues. The most subjective area confronting arbitrators is that of fairness and equity, primarily in discipline/discharge matters where just cause must be demonstrated. Most arbitrators apply the preponderance of evidence standard as the required burden of proof in deciding equity matters. Consistency in handling of prior cases and documentation are especially important in an arbitrator’s weighing of evidence. In summary, grievance arbitration is an extension of democratic due process to the industrial and business world. This article was prepared for presentation at a seminar sponsored by the American Management Foundation, May 6–7, 1993 (Chicago, Illinois). It is a revised, updated version of an article that originally appeared in the October, 1978 issue ofPersonnel Journal.     

Self‐managed work teams: An efficiency‐rationale for pay compression

This paper uncovers a novel mechanism through which pay dispersion can have a negative effect on firm performance, even in the absence of equity or fairness considerations. We use a stylized model of a self‐managed work team to show that, when team‐work involves heterogeneous tasks, the provision of incentives to exert effort conflicts with the provision of incentives to share information relevant for decision‐making. Pay dispersion deteriorates information sharing as it induces workers to conceal “bad news” to maintain their coworkers motivation. The practical implications of our theory are that team empowerment should go hand in hand with pay compression and that empowerment should be avoided when team production involves strongly heterogeneous tasks.     

The Impact of Compulsory Arbitration on Bargaining Behavior: An Experimental Study

A series of experiments compares bargaining behavior under three different settings: no arbitration, conventional and final-offer arbitration. Under no arbitration, disputes with zero payoffs were around 10%, while the pie was equally split in less than half of the cases. Under conventional arbitration – where the arbitrator is free to choose his award – every third negotiation ended in dispute, evidencing a modified chilling effect. Under final-offer arbitration – where the arbitrator must award the bargainers either one of their final offers – there was only a small increase in disputes, while equal splits doubled to 80%. The experiment shows that final-offer arbitration, despite having lower dispute rates, interferes more with bargaining behavior than conventional arbitration, where bargaining behavior is similar to that seen in the no-arbitration treatment. Under final-offer arbitration, negotiators adjust their bargaining strategy on the arbitrator’s expected award.     

Allocation of Prizes in Contests with Participation Constraints

We study all‐pay contests with an exogenous minimal effort constraint where a player can participate in a contest only if his effort (output) is equal to or higher than the minimal effort constraint. Contestants are privately informed about a parameter (ability) that affects their cost of effort. The designer decides about the size and number of prizes. We analyze the optimal prize allocation for the contest designer who wishes to maximize either the total effort or the highest effort. It is shown that if the minimal effort constraint is relatively high, the winner‐take‐all contest in which the contestant with the highest effort wins the entire prize sum does not maximize the expected total effort or the expected highest effort. Rather, a random contest in which the entire prize sum is equally allocated to all the participants yields a higher expected total effort as well as a higher expected highest effort.