An Analysis of the Stability of Hinterland Container Transport Cooperation

We study cooperation among hinterland container transport operators that may share transport capacity and demand in corridors between inland and sea ports. We model this transportation problem as a minimum cost flow problem and assume that operators share the total cost based on a bargaining outcome, which has been proven equivalent to the Shapley value. To examine the stability of such cooperation, we perform a sensitivity analysis of the membership of the Shapley value (the bargaining outcome) to the core (the set of stable outcomes) by leveraging a novel concept of parametric cooperative games. We obtain closed-form solutions for identical players that explicitly characterize the impact of overcapacity on the stability of cooperation. For more general cases, we develop a computational approach based on parametric optimization techniques. The numerical results indicate that our primary analytical result, that is, that overcapacity undermines stability, is generally valid, and that overcapacitated networks may permit stable cooperation in only a limited range of settings.

Driving a Hard Bargain is a Balancing Act: How social preferences constrain the negotiation process

We investigate the haggling process in bargaining. Using an experimental bargaining game, we find that a first offer has a significant impact on the bargaining outcome even if it is costless to reject. First offers convey information on the player’s reservation value induced by his social preferences. They are most often accepted when they are not above the equal split. However, offers which request much more than the equal split induce punishing counteroffers. The bargaining outcome is therefore critically influenced by the balance of toughness and kindness signaled through the offers made in the haggling phase.

Analyzing inter-state negotiations in the Eurozone crisis and beyond

Analyzing international negotiations among the member states of the European Union raises a number of analytical issues, especially in unusual circumstances such as the Eurozone crisis. Our article discusses these issues in the light of existing theory and informed by the empirical analyses assembled in this special issue. ‘National preferences’ or ideal points of the governments involved are driven by their domestic socio-economic and political conditions and institutions, the dimensionality of the negotiations, and strategic considerations. We then discuss how national preferences, states’ bargaining power, the strategic and institutional bargaining context, and the bargaining dynamics jointly influence the bargaining outcome. Examples from European negotiations in the context of the Eurozone crisis illustrate both the complexity of the process and the value of serious, theoretically informed, empirical analysis.

To Link or Not to Link? Agenda Change in International Bargaining

Agendas shape the strategies states adopt in international bargaining and, therefore, the substantive nature of the resulting outcomes. They are also a dynamic feature of the process, as states add and subtract issues in order to shift the bargaining outcome in their favor. This article analyzes when and why states will use these different ‘issue-linkage’ strategies. Focusing on the effects of a successful agreement and the costs of failure, it highlights conditions under which states are likely to add or subtract issues from the bargaining agenda. It tests these arguments using an original dataset of the bargaining strategies states have adopted in climate-change negotiations. It concludes by highlighting the implications the argument has for understanding the outcomes of international negotiations.

R&D INVESTMENTS AS PREBARGAINING STRATEGIES

This paper analyzes a semicollusive, differentiated duopoly. Firms first compete in cost reducing R&D and then cooperate on the output market. The sharing of the joint profit on the output market is modeled as a Nash bargaining game. We study an asymmetric setting in which one firm has a lower unit cost of production than the other firm, before any R&D expenditures. If firms do not agree on how to share their joint profit, they play a noncooperative Nash equilibrium. Assuming linear demand functions, we show that the Nash bargaining outcome is independent of whether firms play a Cournot or a Bertrand Nash equilibrium, as long as both firms supply positive outputs in these equilibria. If the two products are sufficiently differentiated, there is a unique equilibrium in which both firms supply a positive output, and in which the low cost firm always invests more in R&D than the high cost firm. If the two products are not very differentiated, and if the difference in unit costs between the two firms is not too large, there exist two equilibria. In each of these equilibria only one firm supplies a positive output. This can be the low cost or the high cost firm. In the latter case, the initially high cost firm invests so much in R&D that its unit cost after R&D is lower than that of the other firm. This firm then leapfrogs the other firm. If the two products are very similar and if firms apply Bertrand strategies when disagreeing, there exist equilibria in which only one firm supplies a positive output, while in the noncooperative Nash equilibrium that same firm can prevent the other firm from entering the market. We show that, in the context of the Nash bargaining model, this latter firm still has the power to claim a share of the joint profit.

Bargaining Solutions for Resource Allocation Problems

The first unified and systematic treatment of the modern theory of bargaining is presented together with many examples of how that theory is applied in a variety of bargaining situations. This chapter provides a masterful synthesis of the fundamental results and insights obtained from the wide-ranging and diverse bargaining theory literature. Furthermore, it develops new analyses and results, especially on the relative impacts of two or more forces on the bargaining outcome. Many topics—such as inside options, commitment tactics, and repeated bargaining situations—receive their most extensive treatment to date.

Adjustment Mechanisms of New Workers in Industrial Organisations: Implications for Nigerian Workers

This paper adopted qualitative and theoretical method of analysis to describe adjustment mechanisms of new workers in industrial organisations in Nigeria. The purpose was to take a close theoretical analysis of different types and processes of new workers adjustments. The paper highlighted different typologies and processes of adjustments such as personal adjustment, labour–market adjustment, and adjustment to new structures, policies and new behaviours in work organisations. Empirical literature revealed that new workers adjust to work environment, to new labour policies such as pay and performance management, regular hours of work, work pressure, to new organisational structure as well as of collective bargaining outcome among others. The paper highlights reasons why work adjustments occur in organisations to include: Pay status, affiliation, ego, power, emotion and curiosity and these factors motivate new workers to increase commitment. The paper then concludes that practitioners and managers ultimately should seek to design adjustment strategies that take individual newcomer characteristics into consideration and encourage proactive behaviour such as information seeking that help facilitate the development of role clarity, self – efficacy, social acceptance and knowledge of organisational culture.

Endogenous Internet Structure and Bargaining Power in Interconnection Agreements

We consider a model of Internet interconnection. We characterize the Myerson value as the bargaining outcome in interconnection agreements in given networks and provide its interpretation in terms of "betweenness centrality." Then, in an extended network formation model, we characterize the structures of the efficient network and the stable network and confirm the disparity between them. We also identify the condition for the disparity to disappear under bill-and-keep agreements. The possibility of multi-homing and secondary peering is briefly discussed.