Imperfect Information and Strikes: An Analysis of Canadian Experience, 1967–82

ILR Review ◽  
1986 ◽  
Vol 39 (3) ◽  
pp. 377-387 ◽  
Author(s):  
Jean-Michel Cousineau ◽  
Robert Lacroix
Keyword(s):  
Bargaining Power ◽  
Imperfect Information ◽  
Manufacturing Sector ◽  
Probit Analysis ◽  
Relative Power ◽  
Collective Agreements ◽  
Canadian Experience ◽  
Canadian Manufacturing ◽  
Relative Bargaining Power ◽  
Over Time

To test their hypothesis that the propensity to strike is affected less by the actual balance of bargaining power than by the parties' uncertainty about their relative power, the authors perform a probit analysis of data on 1,871 collective agreements negotiated in the Canadian manufacturing sector between 1967 and 1982. They find, consistent with their hypothesis, that some characteristics of individual bargaining units, the relevant industries, and the economy as a whole that affect both the quantity and reliability of information needed to assess relative bargaining power do have significant value in predicting strike incidence across industries and over time.

Testing the bargaining hypothesis in the manufacturing sector in developing countries

1987 ◽  
Vol 41 (4) ◽  
pp. 609-638 ◽  
Author(s):  
Stephen J. Kobrin
Keyword(s):  
Developing Countries ◽  
Host Country ◽  
Bargaining Power ◽  
Manufacturing Sector ◽  
National Study ◽  
Global Integration ◽  
Using Data ◽  
Relative Bargaining Power ◽  
Cross National Study ◽  
Over Time

The bargaining power model of HC–MNC (host country–multinational corporation) interaction conceives of economic nationalism in terms of rational self-interest and assumes both inherent conflict and convergent objectives. In extractive industries, there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing HCs over time, the bargain obsolesces. A cross-national study of the bargaining model, using data from 563 subsidiaries of U.S. manufacturing firms in forty-nine developing countries, indicates that while the bargaining framework is an accurate model of MNC–host country relationships, manufacturing is not characterized by the inherent, structurally based, and secular obsolescence that is found in the natural resource industries. Shifts in bargaining power to HCs may take place when technology is mature and global integration limited. In industries characterized by changing technologies and the spread of global integration, the bargain will obsolesce very slowly and the relative power of MNCs may even increase over time.

Relative Bargaining Power, Corporate Restructuring, and Managerial Incentives

2009 ◽  
Vol 54 (3) ◽  
pp. 453-485 ◽  
Author(s):  
John C. Dencker
Keyword(s):  
Organizational Change ◽  
Bargaining Power ◽  
Fortune 500 ◽  
Corporate Restructuring ◽  
Change Processes ◽  
Manufacturing Firm ◽  
Negative Effect ◽  
Base Salary ◽  
Relative Bargaining Power ◽  
Over Time

Using longitudinal personnel data from a U.S. Fortune 500 manufacturing firm for the period of 1967 to 1993, I assess the effects of corporate restructuring and power differences between a firm and its managers on the nature and use of different incentives. I extend relative bargaining power theory to predict that a firm's ability to provide incentives in the ways it prefers—bonuses instead of increases to base salary or promotions—varies due to differences over time in monitoring and sanctions stemming from organizational change processes. Findings are consistent with the theory and show a negative effect of bonuses on salary increases and of bonuses on promotions, with tradeoffs greatest when the firm's oversight of rewards was highest and termination threats were most explicit. Further support for the theory is the finding that the strength of the negative effect of bonuses on promotions varied across managerial groups due to differences in managers' bargaining power: “fast-trackers” were much less likely to experience a tradeoff than were low performing managers, and women were less likely to experience a tradeoff than were men.

scholarly journals Unionization and Profitability in the Canadian Manufacturing Sector

2005 ◽  
Vol 51 (4) ◽  
pp. 756-777 ◽  
Author(s):  
Pasquale Laporta ◽  
Alexander W. Jenkins
Keyword(s):  
Bargaining Power ◽  
Positive Relationship ◽  
Manufacturing Sector ◽  
Industry Concentration ◽  
Entry Barriers ◽  
Structural Factors ◽  
Resource Misallocation ◽  
Canadian Manufacturing ◽  
Redistribute Income

This study looks at the effects of unions on profitability in the Canadian manufacturing sector, taking into account structural factors such as concentration and entry barriers. The authors find that, although there is a moderately positive relationship between unionization and profitability at low tevels of concentration, at higher levels of concentration unions are able to extract an increasing proportion of incrémental profits that the firm (industry) may earn, until any incrémental profit (rent) associated with further increases in industry concentration is completely captured by the union. This may reflect a greater ability on the part of unions to organize and exercise bargaining power in concentrated industries and redistribute income from capital to labour, but it also leads to underproduction and resource misallocation.

Time is on whose side? Determining the duration of collective agreements in a decentralized collective bargaining system

2020 ◽  
Vol 62 (5) ◽  
pp. 758-783
Author(s):  
Patrice Jalette ◽  
Frédéric Lauzon Duguay ◽  
Mélanie Laroche
Keyword(s):  
Bargaining Power ◽  
Balance Of Power ◽  
Economic Conditions ◽  
Collective Agreement ◽  
Collective Agreements ◽  
Contract Duration ◽  
Maximum Duration ◽  
Strategic Issue ◽  
Relative Bargaining Power ◽  
Decentralized Bargaining

This article examines how the union and management determine the duration of the collective agreement in a decentralized bargaining system characterized by the absence of a rule establishing a maximum duration. Based on information on a population of over 5000 collective agreements and bargaining pairs from the Canadian province of Québec, our analysis reveals that establishment-level collective agreement duration is the result of general economic conditions, but also of coercive comparisons, as well as the parties’ resources and capacities and relative bargaining power, and the characteristics of their interactions. This case shows how contract duration is a strategic issue in establishment-level negotiations where the balance of power generally favours employers.

scholarly journals Wage bargaining as an optimal control problem: a dynamic version of the efficient bargaining model

2021 ◽  
Author(s):  
Marco Guerrazzi
Keyword(s):  
Optimal Control ◽  
Continuous Time ◽  
Bargaining Power ◽  
Wage Bargaining ◽  
Bargaining Model ◽  
Speed Of Convergence ◽  
Wage Setting ◽  
Dynamic Version ◽  
Efficient Bargaining ◽  
Over Time

AbstractIn this paper, I develop a dynamic version of the efficient bargaining model grounded on optimal control in which a firm and a union bargain over the wage in a continuous-time environment under the supervision of an infinitely lived mediator. Overturning the findings achieved by means of a companion right-to-manage framework, I demonstrate that when employment is assumed to adjust itself with some attrition in the direction of the contract curve implied by the preferences of the two bargainers, increases in the bargaining power of the firm (union) accelerate (delay) the speed of convergence towards the stationary solution. In addition, confirming the reversal of the results obtained when employment moves over time towards the firm’s labour demand, I show that the dynamic negotiation of wages tends to penalize unionized workers and favour the firm with respect to the bargaining outcomes retrieved with a similar static wage-setting model.

The (Stabilized) Nash Bargaining Solution as a Principle of Distributive Justice

Utilitas ◽  
2010 ◽  
Vol 22 (4) ◽  
pp. 447-473 ◽  
Author(s):  
MICHAEL MOEHLER
Keyword(s):  
Distributive Justice ◽  
Moral Reasoning ◽  
Bargaining Power ◽  
Nash Bargaining Solution ◽  
Nash Bargaining ◽  
Original Position ◽  
Bargaining Solution ◽  
Moral Intuitions ◽  
Instrumental Reasoning ◽  
Relative Bargaining Power

It is argued that the Nash bargaining solution cannot serve as a principle of distributive justice because (i) it cannot secure stable cooperation in repeated interactions and (ii) it cannot capture our moral intuitions concerning distributive questions. In this article, I propose a solution to the first problem by amending the Nash bargaining solution so that it can maintain stable cooperation among rational bargainers. I call the resulting principle the stabilized Nash bargaining solution. The principle defends justice in the form ‘each according to her basic needs and above this level according to her relative bargaining power’. In response to the second problem, I argue that the stabilized Nash bargaining solution can serve as a principle of distributive justice in certain situations where moral reasoning is reduced to instrumental reasoning. In particular, I argue that rational individuals would choose the stabilized Nash bargaining solution in Rawls’ original position.

Price Negotiation with Merchant Heterogeneity in the Payment Card Industry

2020 ◽  
pp. 1-45
Author(s):  
Chun-Yu Ho ◽  
Li Xu ◽  
Daiqiang Zhang
Keyword(s):  
Bargaining Power ◽  
Penetration Rate ◽  
Nash Bargaining ◽  
Substantial Variation ◽  
Payment Card ◽  
Price Negotiation ◽  
Over Time

We examine price negotiation in the payment card industry by exploiting a unique merchant-, industry-, and city-level dataset. Motivated by the substantial variation in acquirer fees and the heterogeneous merchant card transactions, we use Nash bargaining to model the negotiation over the acquirer fee between an acquirer and a merchant. We find that the merchants secure a larger incremental surplus than the acquirer on average. Moreover, merchants might face upward pressure on acquirer fees as the card penetration rate rises over time, and policies that weaken the acquirer's bargaining power could relieve the upward fee pressure.

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