Amended final-offer arbitration over an uncertain value: A comparison with CA and FOA

Arbitration is increasingly employed to resolve disputes. Two arbitration mechanisms, conventional arbitration (CA) and final-offer arbitration (FOA) are commonly utilized, but previous theoretical and empirical research has found that they are unsatisfactory. Several alternative mechanisms have been proposed, but ultimately laboratory research has found that they do not offer an improvement. An exception is amended final-offer arbitration (AFOA), which not only has desirable theoretical properties but also has been demonstrated to outperform FOA in the laboratory. This study provides a direct laboratory comparison of AFOA with CA. Also, by utilizing an environment with an uncertain payoff to one of the parties, this study tests the robustness of AFOA’s performance relative to FOA. The results indicate that AFOA does outperform FOA, but that AFOA is only weakly better than CA. JEL Classification C7, C9, J5, K4     

Using Laboratory Experiments in Logistics and Supply Chain Research

Laboratory experiments provide an underutilized methodology for subjecting research in logistics and supply chain management to rigorous scientific scrutiny. As discussed in this paper, by following established procedures researchers can create an economic system in which behavior can be observed and replicated. With the ability to control the institution and the environment, researchers have complete information and can exogenously manipulate treatment variables, neither of which may be feasible in field work. We also address many of the reservations that skeptics of laboratory experiments often express including issues of realism, participant sophistication, and payoff stakes. We then provide several examples where experiments have been used to study issues relevant to logistics and supply chain management including auctions, wholesale practices in gasoline markets, inventory replenishment, liberalization of the electric power industry, and deregulation of the natural gas markets. Finally, we identify several additional areas where laboratory experiments could be informative.     

Corporate morality called in question: The case of Cabora Bassa

This article presents a case study of a big German enterprise (Siemens) facing a large wave of public critique and protest activities. The public was concerned about the political circumstances surrounding the construction of the Cabora Bassa hydroelectric dam in Mozambique in which Siemens was largely involved.This study reports the escalating protest against the firm over three years (1970–1972) and the firm's responses during that period. The analysis of the case focusses on the behaviour of the firm which is interpreted in the light of the business social responsibility doctrine. The article proposes that the firm experienced a legitimation crisis and responded by reorienting its philosophy of business.Georg Schreyögg is Professor of Management at the Department of Business at Fern Universität Hagen. He has written five books on Quality of Working Life, Organizational Theory and Business Strategy, and several articles, published in various business journals. His recent research has addressed strategic control.Horst Steinmann is Professor of Management at the faculty of business at Universität Erlange-Nürnberg. He has written several books and a number of articles. His most recent research interest focusses on business ethics and the philosophy of dialogue.Our case is based on an analysis of documents and on interviews. Because the project received wide public interest, many documents, handbills, memoranda, articles, etc. were available. In addition, we had access to internal Siemens documents (letters, internal memoranda, policy statements, delivered opinions, etc.). Much of the material was filed in the Cabora Bassa archive of Siemens which was kindly opened to the researchers. Reconstructing the flow of events was facilitated by interviews with Siemens managers then responsible for the project. The company approved of the publication of the internal memoranda and data cited. Special thanks are due to Wilhelm Forstmann for his support and his willingness to answer all our questions in a series of interviews.     

Cumulative trauma and stress at work

Cumulative trauma is a form of workers' compensation claim in which an employee contends that a major illness or disability is the cumulative result of minor job stresses and strains extending over a period of years. The paper reviews the U.S. legal developments in this area and discusses their implications for both corporate policy and the developments of accounting for the human resource.     

A Comparison of Bundling and Sequential Pricing in Competitive Markets: Experimental Evidence

Technological advances enable sellers to identify relationships among offered goods. Sellers can leverage this information through pricing strategies such as bundling and sequential pricing. While these strategies have primarily been studied under monopoly assumptions, the strategies are available to competitive firms as well. This paper reports on a series of laboratory experiments comparing bundling and sequential pricing while varying the underlying relationship between the goods in markets where a fraction of buyers comparison shop. The results indicate that sequential pricing is generally as profitable to the seller; however, there is evidence that sequential pricing may be more harmful to consumers than bundling when the goods have complementary values or the buyer’s values are positively correlated.