Are Voluntary Agreements Better? Evidence from Baseball Arbitration

[We’re pleased to welcome author John W. Budd of the University of Minnesota. Budd recently published an article in the ILR Review entitled “Are Voluntary Agreements Better? Evidence from Baseball Arbitration,” which is currently free to read for a limited time. Below, Budd reflects on the inspiration for conducting this research:]

Coaches Umpires Pre-game Meeting BaseballThink of a dispute you’ve had with a person or entity that you have an ongoing relationship with, like a business, employer, co-worker, or neighbor. Was that dispute resolved between the two of you, or did it involve a third-party determination by a judge, arbitrator, superior, or some other authority? Do you think it mattered how the dispute was resolved? Would your behavior have changed if it was resolved differently?

Conflict resolution professionals and academics have long believed that voluntarily-negotiated agreements produce better long-run relationships than third-party imposed resolutions. This is because the participants can control their own destiny, tailor agreements to their liking, and feel greater ownership in the process and the outcome. Sounds sensible. But there is very little evidence beyond the parties feeling satisfied immediately after resolution. Maybe a formal procedure like a courtroom or arbitration hearing provides greater levels of due process, or the process doesn’t really matter for a long-term relationship because people forget what happened. The motivation for our research in “Are Voluntary Agreements Better? Evidence from Baseball Arbitration” is to provide evidence on this conventional wisdom, and to hopefully spur others to rigorously analyze this important issue in other settings.

Perhaps one reason why there is not much evidence on the long-term effects of dispute resolution mechanisms is that it’s challenging to find research settings in which the same type of dispute is resolved in different ways and in which the long-term effects can be consistently measured. We identified Major League Baseball as a compelling setting for these analyses because individual performance is well measured, the possibility of relationship breakdown is quite real, the negotiation and arbitration events are uniform and comparable across players, and both voluntary and imposed resolutions are routinely observed. Baseball players with between three (sometimes two) and six years of service are eligible for salary arbitration with their current team. In any given year, some go to arbitration while many settle voluntarily. If voluntarily-negotiated agreements are meaningfully better, then in the following season we would expect to see better on-field performance and more lasting relationships for those who voluntarily reached a salary agreement compared to those who went to arbitration and had a new salary imposed on them.

Using 24 years of data comparing players who arbitrated with those who settled just before arbitrating, we find partial support for the conventional wisdom. We find that relationships are more durable when the player and club negotiate a new salary rather than having a salary imposed by an arbitrator. Specifically, arbitration nearly doubles the likelihood of a player not being with the same team at the end of the season. But there are no statistically significant differences in on-field performance between players who go to arbitration and those who settle voluntarily. This might be due to longer-term career concerns. Most arbitration-eligible players are early in their careers and their on-field performance is visible to other clubs. So they have incentives to set aside any residual feelings from the dispute-resolution process and to perform at a high level in order to position themselves for a lucrative, subsequent contract.

This pattern of results is consistent with scenarios in which the arbitration process harms the player-club relationship and negatively affects player behaviors that are hard to observe (e.g., clubhouse attitude, loyalty to the team), but career concerns and/or loyalty to teammates and fans causes a player to continue to publicly perform at his usual level. Such a scenario can be generalized into an hypothesis that could be applied to other settings—that is, the effect of a dispute resolution procedure will be smaller on dimensions of performance that are valued and easily observed by potential, future partners and larger where performance is harder for future potential partners to observe.

While the data come from the context of professional baseball, these results are important for dispute resolution researchers and practitioners with implications beyond professional baseball. The claimed superiority of voluntary dispute resolution procedures is neither uniformly rejected nor supported. Additional research and perhaps some re-thinking of longstanding assumptions are therefore needed.

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JSCAN: Call for Managing Editor

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Call for applications for JSCAN Managing Editor position

The Journal of Strategic Contracting and Negotiation (JSCAN) is the official journal of the International Association for Contract and Commercial Management. The journal, now in its third year, publishes research and theory about practices that challenge the status quo in strategic contracting and negotiations.

The Editors are looking for a Managing Editor to assist with the running of the journal, and the full call for Managing Editor is available here.

We expect the role to be approximately 5-10 hours a week and to be geographically independent. An editorial remuneration is offered.

Expressions of interest are invited by June 12, 2017. Those interested in making an application should send a brief CV and cover email to Miriam Hodge: Miriam.Hodge@sagepub.co.uk. A more detailed role description is available on request.

Explaining the Recent Decline of Retirement Plans

13855821495_9962de1bf2_z[We’re pleased to welcome Teresa Ghilarducci of The New School for Social Research. Teresa published an article in ILR Review, entitled “Explaining the Decline in the Offer Rate of Employer Retirement Plans between 2003 and 2012” with co-author Joelle Saad-Lessler of The New School for Social Research.]

This study is the first to focus on how changes in worker bargaining power explains the national decline in employers offering retirement account plans to their employees. The study finds that, as expected, the declining bargaining power of workers is the main reason employers are less likely to offer their workers access to retirement plans. This finding should initiate a discussion about the responsibility of employers to help workers save for retirement in a system where Americans are expected to save in private accounts.

The abstract for the paper:ILR_72ppiRGB_powerpoint

Workplace retirement plans (deferred compensation plans [DCs] and deferred benefit plans [DBs]) help workers save for retirement conveniently, consistently, and automatically. But the percentage of firms offering retirement accounts is steadily declining. Between 2001 to 2003 and 2010 to 2012, the retirement plan offer rate of firms dropped from 63 to 55%. The drop is driven by a decline in both DCs and DBs. Using a probit model and an Oaxaca–Blinder threefold decomposition technique applied to data from the Current Population Survey (CPS) for 2001 to 2003 and 2010 to 2012, and using longitudinal analysis of the Survey of Income and Program Participation (SIPP) 2008 panel waves 3 and 11, the authors find that the labor-contracting environment dominates individual- and firm-level variables in explaining whether employers offer a retirement account to their workers. Therefore, attempts to raise retirement account offer rates must address the decline in workers’ bargaining power and the changes in norms relating to provision of benefits. This study contributes to the important discussion about trends in DC and DB coverage and the decline in retirement security.

You can read Explaining the Decline in the Offer Rate of Employer Retirement Plans between 2003 and 2012 from ILR Review free for the next two weeks by clicking here. Want to know all about the latest research from ILR ReviewClick here to sign up for e-alerts!

*Retire image attributed to American Advisors Group (CC).
Find their homepage here.

Teresa GhilarducciTeresa Ghilarducci is an economist, author, and labor economist, and retirement security expert. Her widely circulated New York Times op-ed “Our Ridiculous Approach to Retirement” brought attention to her fresh and comprehensive critique of the America way of provisioning for retirement. Her book, When I’m 64: The Plot Against Pensions and the Plan to Save Them, presents her cutting-edge policy recommendations for restructuring the United States’ deteriorating retirement income security system. Her book Labor’s Capital: The Economics and Politics of Employer Pensions won an Association of American Publishers award in 1992. For the past five years, she has served as a court appointed trustee of the $50 billion retiree health care fund for ford, GM, and Chrysler retirees. Before coming The New School she was a professor at the University of Notre Dame. Dr. Ghilarducci was the 2006–08 Wurf Fellow at Harvard Law School; her research has been funded by the Rockefeller Foundation, the Alfred P. Sloan Foundation, U.S. Department of Labor, Ford Foundation, and Retirement Research Foundation.

Joelle Saad-Lessler

Joelle Saad-Lessler is an economist with extensive experience in econometric modeling, statistical programming, and data analysis. She completed her PhD at Columbia University, and worked as an assistant professor of economics at Long Island University for eight years. Her research work is predominantly applied in nature, with a focus on the economics of immigration. Her publications span a range of issues, from the impact of immigration on local wages, to the economics of international child labor, and the economic impact of global warming.

Celebrating the launch of JSCAN – the Journal of Strategic Contracting and Negotiations!

JSCAN image 3On the 16th of June, we celebrated the launch of the Journal of Strategic Contracting and Negotiations (JSCAN) the official journal of the International Association for Contract and Commercial Management (IACCM). The SAGE editorial team joined members of the IACCM and the JSCAN editorial team at the Hurlingham Club in London to mark the publication of the journal’s inaugural issue in style.

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JSCAN co-Editor Tyrone S. Pistis

The event was held in conjunction with the IACCM Europe forum, the IACCM’s annual European meeting, and conference delegates were invited to attend the launch party. With summer arriving in London, it was the perfect evening for an outdoor celebration, with a barbeque buffet, music, speeches and drinks. Tim Cummins, CEO of IACCM, welcomed everyone, introduced the journal, and talked about JSCAN Editor Tyrone S. Pistis’s initial journal idea and the collaboration with SAGE. Tyrone in turn spoke about the background for the journal, and its aims and scope, and Caroline Lock, Publisher at SAGE, talked warmly of the collaboration with IACCM, a highlight of SAGE 50th anniversary celebrations.

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IACCM CEO Tim Cummins and SAGE Publisher Caroline Lock

The aims of JSCAN is to provide an outlet for research and theory about practices that challenge the status quo in strategic contracting and negotiations, and the commercial implementation of business strategy and policy. The journal will also address the impact of contracting and negotiations on trust and ethics in business. JSCAN is open for submissions, and details of the call for papers can be found here.

Submit Your Research to Journal of Strategic Contracting and Negotiation

jscanWe are pleased to announce a new journal launching in spring 2015, Journal of Strategic Contracting and Negotiation, the official journal of the International Association for Contract and Commercial Management (IACCM).

Journal of Strategic Contracting and Negotiation is an international refereed journal publishing research and theory about practices that challenge the status quo in strategic contracting and negotiations.

Editors:

Usha C. V. Haley, West Virginia University, USA
Tyrone S. Pitsis, Newcastle University, UK; The University of Technology, Sydney, Australia
David M. Van Slyke, Syracuse University, USA

The journal welcomes submissions concerning theory, research and the practice of strategic contracting and negotiation. Multidisciplinary in nature, Journal of Strategic Contracting and Negotiation welcomes articles from a wide range of disciplines. Possible submissions include articles on the following:

  • Papers that speak to the complexity of relational contracting
  • Papers that provide insights into performance based contracts
  • Papers that advance our understanding of contracting under complexity and ambiguity

Papers that explore the practices of negotiation as an ongoing process (not just something that happened until a contract is signed)

As a journal of the IACCM your work will also be translated into an executive summary for 8,000 of its members: giving you the opportunity for creating impact.
For more information on submitting to Journal of Strategic Contracting and Negotiation please click here.

Book Review: Informal Labor, Formal Politics, and Dignified Discontent in India

51+jLLjZIfLInformal Labor, Formal Politics, and Dignified Discontent in India. By Rina Agarwala. New York: Cambridge University Press, 2013. 264 pp. ISBN 978-1-107-66308-4, $29.99 (Paperback).

Looking for a good read for the long weekend? Akshay Mangla of Harvard Business School recently reviewed “Informal Labor, Formal Politics, and Dignified Discontent in India” in ILR Review.

Informal workers, unprotected by official labor law, make up a majority of the labor force in most developing countries. In addition to performing agricultural labor, informal workers construct roads, clean homes, staff kitchens, and knit clothing. Notwithstanding their centrality to the ILR_72ppiRGB_powerpointeconomy, scholarship on the organization and politics of informal workers remains sparse. We know far too little about the work conditions they experience, how they understand their rights, and not least of all, the strategies by which they organize and engage in formal politics. As with much of the informal economy, informal workers are largely treated as a residual category, one whose import is expected to diminish with economic and political modernization. While much recent scholarship documents the resilience of the informal economy in both developing and rich countries, few studies have investigated whether and how informal workers mobilize as a class and demand their rights. If anything, informality is thought to preclude workers from engaging in collective action given the dispersed and insecure nature of informal employment.

Informal Labor, Formal Politics, and Dignified Discontent in India offers a fascinating account of how informal workers in India have organized themselves to make collective demands on the state. India provides a rich and important context in which to study informal labor. More than 90% of the Indian labor force is engaged in informal work. Moreover, India’s diverse federal democracy offers considerable variation for analyzing the conditions under which informal workers successfully organize themselves. Agarwala exploits this variation effectively to examine informal worker organizations across two sectors, the construction industry and the bidi (hand-rolled cigarette) industry, and analyzes how successful they are across three Indian states. The study can be divided broadly into two parts: 1) it examines the organizational demands and strategies of India’s informal workers, and 2) it analyzes the political conditions that enable or constrain informal workers’ organizations from achieving their objectives. The research design allows Agarwala to analyze both industry- and state-level factors that could potentially shape the organizational strategies and effectiveness of informal workers’ organizations.

Click here to read the rest of the review from ILR Review! Want to know about all the latest research and reviews like this from ILR Review? Click here to sign up for e-alerts!

Book Review: Leadership Talk: A Discourse Approach to Leader Emergence

51EybSBEYhLNeed last minute shopping ideas? Can’t go wrong with a good book!

Walker, R., & Aritz, J. (2014). Leadership talk: A discourse approach to leader emergence. New York, NY: Business Expert Press. 150 pp. $43.95 paperback, $19.99 digital.

The review by Sky Marsen of the University of Southern California is published in the January 2015 issue of International Journal of Business Communication.

From the review:

Leadership is increasingly becoming one of the most valued concepts in contemporary society—one that is theorized, discussed, and deconstructed in BPCQ/IJBC3.inddmany fields, ranging from academic monographs to popular media articles. In some contexts, such as many Western individualistic societies, leadership is equated with personal charisma and power. In other contexts, leadership may be viewed as a mode of behavior that can foster ethical or collectivist principles and lead to the betterment of society. Robyn Walker and Jolanta Aritz’s book, Leadership Talk: A Discourse Approach to Leader Emergence, sees leadership as a mode of communication and examines it from the perspective of language use and discourse patterns.

The work’s main tenet is that leadership—defined succinctly as the ability to influence others—emerges through communicative practice rather than personality attributes or psychological disposition. This position suggests that individuals must be attributed leadership status by their followers, and they must continually enact this status through their performance in everyday communicative activities. The authors convincingly argue that leadership is expressed in a set of problem-solving and negotiation skills that are developed through practice in specific professional and social contexts.

Click here to read the rest of the review from International Journal of Business Communication. Want to know about all the latest from International Journal of Business Communication? Click here to sign up for e-alerts!