Last trends on collective bargaining decentralization

Decentralisation of collective bargaining has been one of the key trends concerning labour market regulation of the last decades. Most of European countries have developed – with different breath and scope – procedures and reforms to strengthen the company level of bargaining. The Great Recession has stressed this orientation, particularly in those countries which were under financial pressure. This paper focuses on the cases of four Mediterranean countries – France, Italy, Spain, and Portugal – in order to assess how decentralisation has been carried out and, most importantly, what kind of practical results have been achieved. On the base of these outcomes, it highlights how the debate concerning the structure ofcollective bargaining is changing from a black or white perspective to a new one in which mixed models are possible if the whole system is coordinated, taking into consideration the type of collective bargaining model set in the country.

Tax Advisors and Tax Aggressiveness: A Bargaining Model

We study the bargaining game between a tax agency and a tax advisor-taxpayer team. Specifically, we focus on the factors that motivate tax aggressiveness, and the role of tax advisors in tax aggressiveness. We begin by characterizing the conditions under which tax advisors would give aggressive advice to their clients. Next, we analyze the optimal number of bargaining rounds for the tax agency. Third, we study the counteroffers that the tax agency makes in each round of the bargaining game. In addition, we investigate the conditions under which a high-tax taxpayer type would hire a reputable tax adviser. Last, we analyze when would the taxpayer accept or reject the tax advisor’s recommendation.

Collective Risk and Distributional Equity in Climate Change Bargaining

International climate negotiations occur against the backdrop of increasing collective risk: the likelihood of catastrophic economic loss due to climate change will continue to increase unless and until global mitigation efforts are sufficient to prevent it. We introduce a novel alternating-offers bargaining model that incorporates this characteristic feature of climate change. We test the model using an incentivized experiment. We manipulate two important distributional equity principles: capacity to pay for mitigation of climate change and vulnerability to its potentially catastrophic effects. Our results show that less vulnerable parties do not exploit the greater vulnerability of their bargaining partners. They are, rather, more generous. Conversely, parties with greater capacity are less generous in their offers. Both collective risk itself and its importance in light of the recent Intergovernmental Panel on Climate Change report make it all the more urgent to better understand this crucial strategic feature of climate change bargaining.

Mediation in Reputational Bargaining

Can an uninformed mediator improve outcomes in a dynamic reputational bargaining model? I show that a simple communication protocol used by professional mediators, of announcing an agreement only if both parties privately accept its terms, can increase the payoffs of rational bargainers, but only if communication is noisy: the mediator must sometimes fail to suggest a deal even when both bargainers accept it. (JEL C78, D74, D83)

Do Relative Status of Women and Marriage Characteristics Matter for the Intimate Partner Violence?

This article analyzes intimate partner violence (IPV) in a developing country context, namely, Turkey, which faces an enormous increase in femicide cases over the last decade. Analyzing a very rich nationwide representative survey on IPV, we show that it is not only the absolute status of women but also their relative status in terms of income and education that affects different types of domestic violence, ranging from emotional abuse to physical and sexual violence. Besides, factors related to marriage setting are found to have a significant role in the effect of women’s superior status on IPV. Overall, we provide evidence to support the relative resource theory and invalidate the intra-household bargaining model in the Turkish case.

Alliance Dynamics in the Shadow of Shifting Power

Alliances are costly to form and to terminate, and yet alliances change frequently. Scholars typically attribute these decisions to static factors, such as the power balance, and retrospective ones, such as past power shifts. We highlight another factor: prospective changes, particularly anticipated military strength shifts. We analyze a three-country bargaining model of alliances and war that incorporates forward-looking power dynamics. The model, unlike those restricting players to set roles, flexibly allows players to ally in any arrangement. We find that alliance arrangements that are optimal when power is static are often suboptimal when power fluctuates. Maintaining prior alliances despite expected power shifts may even lead to preventive war. States thus strategically look to the future to identify optimal alliances in the present. Quantitative analyses corroborate the expectation. As the anticipated size of power shifts increases, alliance changes become more common. Accordingly, states navigate expected changes in the international landscape by rearranging current alliance commitments that can help minimize the risk of conflict. When power balances are in flux, malleable institutional arrangements may prove preferable to rigid ones.

International trade agreements and bargaining

In this dissertation, I provide a compelling explanation about why the World Trade Organization (WTO) permits retaliation only after a lengthy delay. I then explain why it usually rejects requests for retaliation (or a reciprocal withdrawal of concessions) in other related inter- national agreements. Next, I consider a more general problem about agents negotiating over an allocation of some surplus. This multilateral bargaining model could be applied to international trade or many real-world negotiations. I begin by taking a dynamic mechanism design approach and analyze the welfare effects among same-sector retaliation with and without delay as well as cross-sector retaliation with and without delay. I show that a retaliation with delay mechanism generates higher welfare and supports a higher self-enforcing level of cooperation than does a retaliation without delay mechanism. I demonstrate that under certain conditions, a same-sector retaliation mechanism generates higher welfare and supports a higher self-enforcing level of cooperation than does a cross-sector retaliation mechanism. All the above results are showing to hold for several different stochastic process of how a state of the world evolves. I then consider a more general case of bargaining where the size of the surplus is endogenized. In my model of the first two chapters after the introduction, although the size of the surplus varies across time, it still evolves in a stochastic manner. In many real-world negotiations, however, a surplus is usually created by players and each player may have certain power to influence a recognition process. Hence, my main innovation in the last chapter is to allow a surplus as well as recognition probabilities to be endogenously determined by players' actions. I assume that players' actions can have either persistent or transitory effects on a bargaining process. I compare the equilibrium outcomes under different voting rules and show that when a competition becomes less intensive (i.e., a proposal needs the consents of more players), it raises social welfare while it makes a free-ride problem more severe.

International trade agreements and bargaining

In this dissertation, I provide a compelling explanation about why the World Trade Organization (WTO) permits retaliation only after a lengthy delay. I then explain why it usually rejects requests for retaliation (or a reciprocal withdrawal of concessions) in other related inter- national agreements. Next, I consider a more general problem about agents negotiating over an allocation of some surplus. This multilateral bargaining model could be applied to international trade or many real-world negotiations. I begin by taking a dynamic mechanism design approach and analyze the welfare effects among same-sector retaliation with and without delay as well as cross-sector retaliation with and without delay. I show that a retaliation with delay mechanism generates higher welfare and supports a higher self-enforcing level of cooperation than does a retaliation without delay mechanism. I demonstrate that under certain conditions, a same-sector retaliation mechanism generates higher welfare and supports a higher self-enforcing level of cooperation than does a cross-sector retaliation mechanism. All the above results are showing to hold for several different stochastic process of how a state of the world evolves. I then consider a more general case of bargaining where the size of the surplus is endogenized. In my model of the first two chapters after the introduction, although the size of the surplus varies across time, it still evolves in a stochastic manner. In many real-world negotiations, however, a surplus is usually created by players and each player may have certain power to influence a recognition process. Hence, my main innovation in the last chapter is to allow a surplus as well as recognition probabilities to be endogenously determined by players' actions. I assume that players' actions can have either persistent or transitory effects on a bargaining process. I compare the equilibrium outcomes under different voting rules and show that when a competition becomes less intensive (i.e., a proposal needs the consents of more players), it raises social welfare while it makes a free-ride problem more severe.