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The author develops a bilateral Nash bargaining model under value uncertainty and private/asymmetric information, combining ideas from axiomatic and strategic bargaining theory. The solution to the model leads organically to a two-tier stochastic frontier (2TSF) setup with intra-error dependence. The author presents two different statistical specifications to estimate the model, one that accounts for regressor endogeneity using copulas, the other able to identify separately the bargaining power from the private information effects at the individual level. An empirical application using a matched employer–employee data set (MEEDS) from Zambia and a second using another one from Ghana showcase the applied potential of the approach.

Certain features of collective bargaining have, over time, promoted uniformity and sometimes inflexibility in teacher policy and negotiated contracts. From the start, the National Labor Relations Act (NLRA) – passed in 1935 to regulate unionization and collective bargaining in the private, industrial sector – served as the template for state labor laws regulating education. The framers of the NLRA never had the needs of the public sector or schools in mind. Yet the 35 states that now require collective bargaining for teachers have drawn on the NLRA’s procedures and standards. For example, they have used the NLRA for defining how teachers organize and are represented; what constitutes an unfair labor practice; and how obligatory membership or dues provide union security (e.g. agency shop, union shop). They have also drawn on the NLRA to define what range of issues can be bargained; whether strikes are legal; and what processes are used to resolve an impasse (e.g. mediation, fact finding, binding arbitration, or all three).¹ Although the laws of the 35 states show some important variations, their similarity is more striking than their differences. Jessup (1985) concluded that the narrow scope of bargaining established by New York’s Taylor Law “severely restricted the range of concerns teachers could productively bring to the bargaining table” (p. 195).

Faculty unionization is growing, and library faculty members are included in many collective bargaining units. Yet there is a dearth of information on how well collective bargaining contracts address the sometimes unique nature of library faculty work. This article explores contracts in a number of Ohio universities and from selective institutions around the country to see how well they accommodate the professional and work-related needs of librarians. Major contractual issues addressed include governance, academic freedom, workload, salary, and the retention, tenure, and promotion (RTP) of faculty, among others.

Recent US federal court rulings have provided new guidance on the use of economic models of bargaining in estimating reasonable royalty damages in patent cases. After reviewing relevant case law and providing an overview of the bargaining range approach, we describe one analytic method (the Rubinstein Bargaining Model) for developing a quantitative starting point with which to divide a bargaining range and explain how it can be tied, at least in part, to the facts and circumstances of the parties around the time of the Hypothetical Negotiation. We also describe how this approach can be used in conjunction with an analysis of other quantitative and qualitative factors related to the bargaining power of the parties, to help estimate reasonable royalty damages.

Objective – To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.

Data – Data were collected and compiled from four sources: a national mail survey to independent pharmacies, National Council for Prescription Drug Programs (NCPDP) Pharmacy database, 2000 U.S. Census data, and 2006 Economic Census data.

Results – Reimbursements varied substantially across pharmacies. Reimbursement for 20mg Lipitor (30 tablets) ranged from $62.40 to $154.80, and for 10mg Lisinopril (30 tablets), it ranged from $1.05 to $18. For brand-name drug Lipitor, local area pharmacy ownership concentration had a consistent positive effect on pharmacy bargaining power across model specifications (estimates between 0.084 and 0.097), while local area per capita income had a consistent negative effect on pharmacy bargaining power across specifications(−0.149 to −0.153). Few statistically significant relationships were found for generic drug Lisinopril.

Conclusion – Significant variation exists in PDP reimbursement and pharmacy bargaining power with PDPs. Pharmacy bargaining power is negatively related to the competition level and the income level in the area. These relationships are stronger for brand name than for generics. As contract offers tend to be non-negotiable, variation in reimbursements and pharmacy bargaining power reflect differences in initial insurer contract offerings. Such observations fit Rubinstein's subgame perfect equilibrium model.

Implication – Our results suggest pharmacies at the most risk of closing due to low reimbursements are in areas with many competing pharmacies. This implies that closures related to Part D changes will have limited effect on Medicare beneficiaries’ access to pharmacies.

In this paper, we build a complete information bargaining model of collective negotiation that can explain delays in reaching agreements. We structurally estimate the model using firm-level data for large Spanish firms. For this type of firm, the assumption of complete information seems a sensible one, and it matches the collective bargaining environment better than the one provided by private information models. The specification of the model with players having different discount factors allows us to measure their relative bargaining power, a recurrent question in the theory of bargaining. Our model replicates the data on delays at the sectoral and aggregate level. We also find that both entrepreneurs and workers have high discount factors, and no evidence that entrepreneurs have greater bargaining power, as usually assumed.

Purpose – Land assembly can mitigate the negative environmental impacts of land fragmentation on urban areas, agriculture, and wildlife. However, the assembler faces several obstacles including transactions costs and the strategic bargaining behavior of landowners. The purpose of this chapter is to examine how the order of bargaining and the nature of contracts may impact the land assembler's problem.

Methodology – We develop theoretical predictions of subjects' behavior and compare these to behavior in a laboratory land-assembly game with monetary incentives.

Findings – Sellers bargain more aggressively when bargaining is sequential compared to simultaneous. Noncontingent contracts increase bargaining delay and the likelihood of failed agreements. Buyers and sellers act more aggressively when there are multiple bargaining periods, leading to significant bargaining delay. When a seller has an earnings advantage in the laboratory, it is the first seller to bargain in noncontingent contract treatments. In sequential bargaining treatments, most sellers preferred to be the first seller to bargain.

Research limitations – Our laboratory experiments involved only two sellers, complete information, and costless delay. Land assembly in the field may involve many sellers, incomplete information, and costly delay.

Practical implications – Some of our results contradict conventional wisdom and a common result from the land-assembly literature that it is advantageous to be the last seller to bargain, a so-called “holdout.” Our results also imply that fully overcoming the holdout problem may require subsidies or compulsory acquisition.

Originality – This chapter is one of the first to experimentally investigate the land-assembly problem, and the first to specifically examine the role of bargaining order and contract type.

First contract arbitration (FCA) provisions are posed as a solution to the difficulties of negotiating a first contract for newly certified bargaining units. FCA is a longstanding, and no longer controversial, element of Canadian labor legislation. FCA provisions now exist in six Canadian jurisdictions and four distinct FCA models have developed (the exceptional remedy or fault model, the automatic access model, the no-fault model, and the mediation intensive model). In the United States the Employee Free Choice Act (EFCA) included a highly contested proposal to amend the National Labor Relations Act (NLRA) to include an FCA provision similar to the Canadian automatic access model. This chapter offers a balanced assessment of FCA evidence from Canada addressing the main objections to FCA in the EFCA debates. Individual case level data from jurisdictions representing each of the four FCA models is examined. The evidence demonstrates that although FCA is widely available in Canada, it is an option that is rarely sought and, when sought, rarely granted; that parties involved in FCA are able to establish stable bargaining relationships; and, that this process does not, as critics charge, simply prolong the life of nonviable bargaining units. This chapter concludes by suggesting that the practice under Quebec's “no-fault” model and British Columbia's “mediation intensive” model merit consideration for adoption elsewhere. These models position the FCA process as a mechanism fostering collective bargaining and voluntary agreements, rather than treating it as a remedy for dysfunctional negotiations and as part of the unfair labor practice framework.

JoAnn Wypijewski, reflecting on the experience of workers laid off from General Electric’s (GE) Bloomington, Indiana refrigerator plant, as GE announced profits of $12.7 billion, and the relocation of half the production to Celaya, Mexico, asks: What will it take to match fire with fire at GE, not just in Bloomington but everywhere? Twenty years ago, Jack Welch openly articulated a strategy for taking the company to where it is today. The GE unions never developed a parallel strategy, and 100,000 lost jobs later, most of them still haven’t shed their faith in what the AFL-CIO likes to call “high-road capitalism.” During the 2000 national contract talks, Robert Thayer, the Machinists’ representative to the CBC, was trying to convince the company to agree not to interfere in future unionization drives, arguing that a “contract is a partnership, not a hindrance.” To which the company coolly asserted, “GE has never been neutral and doesn’t intend to be neutral” (Wypijewski, 2001, p. 22).GE has become an icon of global capital mobility and union avoidance. However, GE’s current capacities can be traced back to a long term, explicit strategy of corporate reorganization initiated in the 1940s. At that time GE was a vertically integrated manufacturing conglomerate, based in a series of huge, northern U.S. plants, organized at extremely high density by the left and militant UE. In the sixty years since, GE has transformed itself into a networked and globalized conglomerate, whose manufacturing capacity has been relocated endlessly, first into smaller U.S. greenfield sites and then increasingly overseas, decimating U.S. union density, and replacing UE with a patchwork of AFL-CIO affiliates that have embraced a far more conservative and limited vision of unionism. U.S. labor has been unable to halt this transformation.