Coordinating Project Outsourcing Through Bilateral Contract Negotiations

2020 ◽  
Author(s):  
Chengfan Hou ◽  
Mengshi Lu ◽  
Tianhu Deng ◽  
Zuo-Jun Max Shen
Keyword(s):  
Bargaining Power ◽  
Problem Definition ◽  
Power Structures ◽  
Bargaining Process ◽  
Bilateral Bargaining ◽  
Power Cost ◽  
Single Task ◽  
Contract Negotiations ◽  
Bilateral Contract ◽  
Payment Timing

Problem definition: Project outsourcing has been a pronounced trend in many industries but is also recognized as a major cause for project delays. We study how companies can coordinate outsourced projects with uncertain completion times through bilateral contract negotiations. Academic/practical relevance: Misaligned subcontractor incentives may result in substantial losses to both project clients and subcontractors. Coordinating subcontractors’ efforts through proper contracts is imperative to the success of project outsourcing. Most previous studies on project contracting have not addressed subcontractors’ bargaining powers or the dynamic bargaining process in negotiations. We fill in this gap by studying bilateral bargaining between the client and subcontractors, which better reflects real-world negotiations. Methodology: We model project contract negotiations as a multiunit bilateral bargaining game. We derive the conditions such that bilateral negotiations can achieve system coordination and characterize the equilibrium negotiation outcomes. We then compare the conditions and equilibria under various model settings to study their impact on project contracting. Results: Our study uncovers how the coordination of project outsourcing is impacted by the contract form, bargaining power structure, precedence network topology, payment timing, external opportunities, and negotiation protocols. For single-task projects, the widely used fixed-price (cost-plus) contract can achieve system coordination only when the subcontractor (client) possesses full bargaining power. Cost-sharing and time-based incentive contracts, which perform well for single-task projects, may not be effective for projects with parallel tasks when any subcontractor’s bargaining power is sufficiently high. Projects with serial tasks can be coordinated only under certain extreme bargaining power structures. Delaying payments always exacerbates the incentive misalignment. Managerial implications: Our analysis provides insights and guidelines to companies regarding how to select proper contract forms and payment timing schemes, based on the characteristics of the projects and subcontractors, to ensure the effectiveness of project outsourcing. Our results also highlight the importance of bargaining modeling in project contracting.

Navigating gender in elite bargains: Women's movements and the quest for inclusive peace in Colombia

2021 ◽  
pp. 1-24
Author(s):  
Alexandra Phelan ◽  
Jacqui True
Keyword(s):  
Large Scale ◽  
Armed Forces ◽  
Women's Movements ◽  
Power Structures ◽  
Peace Agreement ◽  
Bargaining Process ◽  
Political Bargaining ◽  
Significant Case ◽  
Gender Based ◽  
And Gender

Abstract A growing body of scholarship connects the participation of women and the inclusion of gender provisions to the sustainability of peace settlements. But how do women's groups navigate gender power structures and gendered forms of violence within complex and fragile political bargaining processes aimed at ending large-scale conflict? The 2016 Colombian peace agreement, internationally applauded for its inclusion of strong gender provisions and women's participation as negotiators and peace advocates, is a significant case for examining these questions. Drawing on original case material, including interviews of key actors on different sides of the conflict – this article analyses the political bargaining dynamics within and among women's movements, the Santos government and the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, FARC). We argue that the inclusion of women was pivotal in transforming the elite bargaining process and power structures of Colombian society enabling a gender-based approach to the substantive peace agenda addressing transitional gender justice for sexual violence survivors and gender-equal redistribution through land and rural reform programmes. The study suggests that deeply situated political bargaining analysis is essential to navigating gender in elite bargains rather than a one-size-fits-all approach to inclusive peace.

scholarly journals INVESTIGATING BARGAINING POWER OF FARMERS AND PROCESSORS IN IRAN'S DAIRY MARKET

2018 ◽  
Vol 51 (1) ◽  
pp. 126-141 ◽  
Author(s):  
ZEINAB SHOKOOHI ◽  
AMIR HOSSEIN CHIZARI ◽  
MAHDI ASGARI
Keyword(s):  
Bargaining Power ◽  
Expectation Maximization Algorithm ◽  
Raw Milk ◽  
Annual Data ◽  
Bargaining Model ◽  
Government Officials ◽  
Dairy Farmers ◽  
Bilateral Bargaining ◽  
Monte Carlo Expectation Maximization ◽  
Milk Market

AbstractThe farm-gate price of raw milk in Iran is determined annually in negotiations among representatives of dairy processors, milk producers, and government officials. This study estimates the average bargaining power of dairy farmers and processors, through applying the generalized axiomatic Nash approach in a bilateral bargaining model. We employ annual data from 1990 to 2013 to estimate econometric representation of a bilateral bargaining model using a Monte Carlo expectation maximization algorithm. Results imply a higher bargaining power of 0.69 for processors, compared with 0.31 for farmers. This asymmetry of bargaining power causes unequal allocation of gains in the milk market.

The Community Trap: Liberal Norms, Rhetorical Action, and the Eastern Enlargement of the European Union

2001 ◽  
Vol 55 (1) ◽  
pp. 47-80 ◽  
Author(s):  
Frank Schimmelfennig
Keyword(s):  
European Union ◽  
Eastern Europe ◽  
European Integration ◽  
Bargaining Power ◽  
Central And Eastern Europe ◽  
The State ◽  
The European Union ◽  
Eastern Enlargement ◽  
Bargaining Process ◽  
Rhetorical Action

The decision of the European Union to expand to Central and Eastern Europe is a puzzle for rationalist intergovernmentalism. This approach to the study of European integration accounts for most of the preferences of the state actors and many characteristics of the intergovernmental bargaining process but fails to explain why it resulted in the opening of accession negotiations. I introduce the mechanism of rhetorical action in order to show how the supporters of enlargement succeeded in overcoming the superior material bargaining power of their opponents. Through the strategic use of arguments based on the liberal norms of the European international community, the “drivers” caught the “brakemen” in the community trap and, step by step, shamed them into acquiescing in Eastern enlargement.

scholarly journals Why Does Headquarters Voluntarily Transfer its Bargaining Power to Business Units?

2019 ◽  
Vol 14 (2) ◽  
pp. 105-114
Author(s):  
Shin’ya Okuda ◽  
◽  
Takaya Kubota ◽  
Yoshimi Chujo ◽  
◽  
...  
Keyword(s):  
Organizational Structure ◽  
Bargaining Power ◽  
Incomplete Contracts ◽  
Cost Structure ◽  
Business Unit ◽  
Incomplete Contract ◽  
Power Cost ◽  
Business Units ◽  
Delegation Of Authority ◽  
Model Independence

The objective of our paper is to provide the reason why the headquarters voluntarily transfer its bargaining power to the business unit by stylizing an incomplete contract model. Our model shows that the equilibrium bargaining power selected by the headquarters is negatively correlated with the importance attached to the business unit’s operations. It means when incomplete contracts severely restrict an important business unit’s incentive to invest because of holdup problem, then the headquarters should necessarily provide the business unit with some degree of bargaining power. This result is consistent with the fact that the independence of a business unit (e.g., spin-offs) is a commonly observable practice. Building on our model, independence of the business unit can be interpreted as a consequence of a gradual delegation of authority by the headquarters. Our paper contributes to both of economics and management accounting literature through providing a model concerning to a decision of organizational structure. Keywords: bargaining power; cost structure; independence of business unit

A NOTE ON SIMPLE MONETARY POLICY RULES WITH LABOR MARKET AND FINANCIAL FRICTIONS

2018 ◽  
Vol 22 (5) ◽  
pp. 1321-1344 ◽  
Author(s):  
Šarūnas Girdėnas
Keyword(s):  
Labor Market ◽  
Bargaining Power ◽  
Financial Frictions ◽  
Production Costs ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Bargaining Process ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Keynesian Model

We consider a New-Keynesian model with financial and labor market frictions where firms borrowing is limited by the enforcement constraint. The wage is set in a bargaining process where the firm's shareholder and worker share the production surplus. As debt service is considered to be a part of production costs, firms borrow to reduce the surplus which allows to lower the wage. We study the model's response to financial shock under two Taylor-type interest rate rules: first one responds to inflation and borrowing, second one to inflation and unemployment. We have found that the second rule delivers better policy in terms of the welfare measure. Additionally, we show that the feedback on unemployment in this rule depends on the extent of workers' bargaining power.

„Urbanes” Mietrecht? Der römische Wohnungsmarkt zwischen Preismechanismus und Intervention

2019 ◽  
Vol 136 (1) ◽  
pp. 233-270
Author(s):  
Constantin Willems
Keyword(s):  
Civil War ◽  
Bargaining Power ◽  
Julius Caesar ◽  
Price Mechanism ◽  
Contract Negotiations ◽  
Rental Market ◽  
External Interventions ◽  
The City

Abstract 'Urban' tenancy law? The Roman rental market between price mechanism and intervention. Renting a flat in Roman times did not come cheap. The Roman jurists left the determination of the merces up to the parties to the locatio conductio and permitted them to circumvent each other in the course of the contract negotiations (se invicem circumscribere) – a rule that at first glance seems to privilege the landlord. In this paper, it is suggested that the system of sub-rent of insulae and the standardized Roman rental year, starting each year at the calends of July, contributed to a reduction in asymmetry of bargaining power between landlord and tenant. Only in exceptional cases there were external interventions in the price mechanism: In the perils of the civil war, Julius Caesar and Octavian issued laws remitting the annual rent below 500 sesterces for the inhabitants of Italy and below 2,000 sesterces for those of the city of Rome. In conclusion, these structures and rules show that in this regard, Roman tenancy law was specifically designed with a view to the inhabitants of the city of Rome and thus can be qualified as 'urban' law.

scholarly journals Diagnosing Hospital System Bargaining Power in Managed Care Networks

2015 ◽  
Vol 7 (1) ◽  
pp. 243-274 ◽  
Author(s):  
Matthew S. Lewis ◽  
Kevin E. Pflum
Keyword(s):  
Managed Care ◽  
Bargaining Power ◽  
Relative Concentration ◽  
Market Concentration ◽  
Bargaining Game ◽  
Local Market ◽  
Bargaining Process ◽  
Hospital System ◽  
The Impact ◽  
Managed Care Organizations

We investigate the impact of hospital system membership on negotiations between hospitals and managed care organizations (MCOs). Previous research finds that system hospitals secure higher reimbursements by exploiting local market concentration. By leveraging system membership in the bargaining game, however, system hospitals may also extract a higher percentage of their value to an MCO. Our findings reveal that more of the observed price gap between system and nonsystem hospitals can be attributed to bargaining power differences than to differences linked to relative concentration. These results highlight the importance of explicitly modeling the bargaining process when evaluating negotiated-price markets more generally. (JEL C78, I11, I13, L14)

The Puzzle of Militia Containment in Civil War

2021 ◽  
Author(s):  
Brandon Bolte
Keyword(s):  
Civil War ◽  
Civil Wars ◽  
Bargaining Power ◽  
Civil Defense ◽  
The State ◽  
Window Of Opportunity ◽  
Bargaining Process ◽  
Time Inconsistent ◽  
Future Work ◽  
State Militias

Abstract In most contemporary civil wars, governments collude with non-state militias as part of their counterinsurgent strategy. However, governments also restrict the capabilities of their militia allies despite the adverse consequences this may have on their overall counterinsurgent capabilities. Why do governments contain their militia allies while also fighting a rebellion? I argue that variation in militia containment during a civil war is the outcome of a bargaining process over future bargaining power between security or profit-seeking militias and states with time-inconsistent preferences. Strong states and states facing weak rebellions cannot credibly commit to not suppressing their militias, and militias with sufficient capabilities to act independently cannot credibly commit to not betraying the state. States with limited political reach and those facing strong rebellions, however, must retain militia support, which opens a “window of opportunity” for militias to augment their independent capabilities and future bargaining power. Using new data on pro-government militia containment and case illustrations of the Janjaweed in Sudan and Civil Defense Patrols in Guatemala, I find evidence consistent with these claims. Future work must continue to incorporate the agency of militias when studying armed politics, since these bargaining interactions constitute a fundamental yet undertheorized characteristic of war-torn states.

scholarly journals VARI E TI ES OF SOCIAL UNIONISM: TOW A RDS A FRAMEWORK FOR COM P ARISON

Just Labour ◽  
1969 ◽  
Author(s):  
Stephanie Ross
Keyword(s):  
Collective Bargaining ◽  
Bargaining Power ◽  
Bargaining Process ◽  
Term Survival ◽  
Long Term Survival ◽  
Union Activity

In academicandactivistdebatesaboutunion renewal, thereplacementofbusinessunionism withsocial unionismisseenas central to the labour movement’sshort-and long-term survival. Socialunionism, generally understood toinvolve bothengagementwith social justicestruggles beyond the workplaceand methodsof unionactivitybeyond the collective bargaining process,is claimedtoincreasethe labourmovement’sorganizing capacity, bargaining power, andsocialand political weight.However, despite its increased importance, socialunionism’svariousmeanings,strategies,and implicationsremain relativelyunexamined,and verydifferent approachesare often lumped together. Using concepts from socialmovement theory, thispaperproposesananalyticalframeworkfor systematically comparing differentconcretemanifestationsof socialunionism.In particular, socialunionistinitiatives varyaccordingto 1) the ethos orcollective action frameused to rationalize union activity; 2)therepertoireor strategic meansusedtoacton thatethos;and3) theinternal organizational practicesandpower relations whichshape who isinvolved indefiningandcarryingout

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