collective bargaining in the public sector the effect of legal structure on dispute costs and wages this paper examines the impact of collective bargaining legislation on dispute costs and wages using a panel of canadian public sector contracts the authors results suggest that policymakers designing collective bargaining legislation face a trade off between reducing dispute costs and increasing wages dispute costs are lower under compulsory arbitration than under the right to strike or when no collective bargaining legislation exists hence a switch to compulsory arbitration could potentially make both the union and the employer better off by reducing dispute costs however the authors find that wages are higher under compulsory arbitration than under other legal structures copyright 1991 by american economic association

does fact finding promote settlement theory and a test nonbinding recommendations such as provided by fact finders are shown to significantly increase voluntary settlements in bargaining theoretically it is unclear whether recommendations will increase settlement rates a recommendation may reduce outcome uncertainty thereby chilling bargaining and increasing dispute rates on the other hand a recommendation may give the parties a focal point around which an agreement is made which of these effects dominates is a question that we consider using theory and data from controlled bargaining experiments the data show the dominance of a focal point effect for suggestions highlighting their potential role in improving dispute settlement procedures

does resorting to online dispute resolution promote agreements experimental evidence abstract this paper presents an experiment performed to test the properties of an innovative bargaining mechanism called automated negotiation used to resolve disputes arising from internet based transactions the main result shows that the settlement rule tends to chill bargaining as it creates incentives for individuals to misrepresent their true valuations which implies that automated negotiation is not able to promote agreements however this perverse effect depends strongly on the conflict situation when the threat that a disagreement occurs is more credible the strategic effect is reduced since defendants are more interested in maximizing the efficiency of a settlement than their own expected profit the implications of these results are then used to discuss the potential role of public regulation and reputation mechanisms in cyberspace

bayesian modeling and computations in final offer arbitration this article develops a bayesian model for the analysis of bidding behavior in final offer arbitration posterior calculations are obtained using a markov chain algorithm an example is considered using salary data from major league baseball

strikes arbitration and teacher salaries a behavioral analysis this study uses bacharach and lawler s behavioral theory of bargaining to derive hypotheses about the impact of strikes and compulsory interest arbitration on teacher salaries those hypotheses are tested with data sets on illinois and iowa school districts and on a national sample of teachers drawn from the current population survey the results suggest that strike use affects teacher salaries but that arbitration use does not additional tests indicate that the availability of both arbitration and of the legal or de facto right to strike has similar effects on salary levels increasing salaries by about 10 percent the findings also suggest that arbitration and the strike are used as defensive rather than offensive strategies

comparative productivity the ussr eastern europe and the west this paper compiles comparative measures of output per worker in 1975 in four socialist and seven western market economy wme countries and explores sources of observed differences between the two groups of countries in that regard such differences seem explicable only partially by reference to differences in per worker capital stock and farm land a residual disparity of 25 to 34 percent in favor of wme countries appears to testify to superior efficiency in the latter copyright 1987 by american economic association

estimates of energy subsidies in china and impact of energy subsidy reform abstract for a transitional economy such as china some energy subsidies are reasonable and sometimes even necessary for achieving social goals however with rising energy prices and environmental concerns we see conflicts emerging between energy subsidies energy demand supply fundamentals and climate change considerations energy subsidies have important implications for sustainable development through their effects on energy use efficiency and the choice of fuel source this paper applies the price gap approach to estimate china s energy subsidies results indicate that china s energy subsidies amounted to cny 356 73 billion in 2007 equivalent to 1 43 of gdp subsidies for oil products consumption are the largest followed by subsidies for the electricity and coal sectors furthermore a cge model is used to analyze the economic impacts of energy subsidy reforms our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions but will have negative impacts on macroeconomic variables we conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures which could lead to reducing energy intensity and favoring the environment

modelling long term oil price and extraction with a hubbert approach the lopex model abstract the lopex l ong term o il p rice and ex traction model generates long term scenarios about future world oil supply and corresponding price paths up to the year 2100 in order to determine oil production in non opec countries the model uses hubbert curves hubbert curves reflect the logistic nature of the discovery process and the associated constraint on temporal availability of oil extraction paths and world oil price path are both derived endogenously from opec s intertemporally optimal cartel behaviour thereby opec is faced with both the price dependent production of the non opec competitive fringe and the price dependent world oil demand world oil demand is modelled with a constant price elasticity function and refers to a scenario from acropolis poles lopex results indicate a significant higher oil price from around 2020 onwards compared to the reference scenario and a stagnating market share of maximal 50 to be optimal for opec

final offer arbitration with uncertainty averse parties abstract final offer arbitration foa is a widely used binding dispute resolution mechanism where an impartial arbitrator is constrained to choose one of the two final offers proposed by two disputing parties we build an equilibrium model of foa with players averse to arbitral uncertainty to study three important issues the role of foa in incentivizing negotiated settlements the convergence of final offers and the normative effect of diversity of arbitrator opinion we show that increase in arbitral uncertainty increases the likelihood of negotiated agreements and make the final offers converge to each other risk aversion is not necessary for convergence of offers precision and mean of arbitral uncertainty matter differently and can be controlled separately moreover as also argued by the industry practitioners carefully selected level of diversity of opinion in the arbitrator roster increases the welfare of negotiating parties

salary arbitration and pre arbitration negotiation in major league baseball two assumptions in this analysis of baseball salary arbitration are that 1 players and clubs to serve their interests in pre arbitration negotiation submit final offers to maximize and minimize

strategic delegation in bargaining abstract principals have the opportunity to delegate to an agent in the context of the nash bargaining model this paper resolves a shortcoming in the related bargaining literature in equilibrium a symmetric outcome typically will not result and multiple equilibria exist

divergent expectations as a cause of disagreement in bargaining evidence from a comparison of arbitration schemes the fact that settlement rates are much higher where final offer arbitration rather than conventional arbitration is the dispute settlement procedure is used as the basis of a test of the role of divergent and relatively optimistic expectations in causing disagreement in negotiations calculations of identical expectations contract zones using existing estimates of models of arbitrator behavior yield larger identical expectations contract zones in conventional arbitration than in final offer arbitration this evidence clearly suggests that divergent expectations alone are not an adequate explanation of disagreement in labor management negotiations a number of alternative explanations for disagreement are suggested and evaluated

final offer arbitration in final offer arbitration the two parties to a dispute submit final offers to an arbitrator the arbitrator then chooses as the binding solution that offer which is closest to his own view of the appropriate outcome because the disputants are imperfectly informed about the arbitrator s preferences final offer arbitration can be modeled as a game of imperfect information interesting questions arise concerning the nature of the optimal strategies and how they are affected by different characteristics of the arbitrator and the disputants we provide conditions for an equilibrium to exist in a final offer arbitration game when there are k issues the probability function is not specified and the disputants are either risk averse or risk neutral furthermore the players may have differing beliefs about the arbitrator s probability function we demonstrate that increased risk aversion by one of the parties will result in both players choosing positions farther away from the more risk averse party we also discover the affect of bias as well as the effect of increased sensitivity by the arbitrator on the positions taken by the players

state dependence in the incidence of strikes evidence from canadian contract data using heckman s dynamic probit model abstract this paper considers whether there is state dependence in strike incidence using longitudinal contract data from canada i obtain my estimates using heckman s estimator for dynamic probit models and find that there is no state dependence in strike incidence

negotiation under possible third party resolution abstractthe effect of a possible third party resolution on negotiation behavior is studied in an economic bargaining experiment the bargaining phase is preceded by a production phase that allows for different fairness principles to guide the division of the total production value the experimental results show that a possible third party resolution lowers the dispute costs by reducing the number of rounds of alternating offers in the presence of a third party negotiators make first offers that are more strongly related to their production which reduces the number of bargaining rounds the production phase has an effect on the distributional property of the agreements in negotiations in which third party resolution is an option the negotiation outcome shifts toward a more unequal outcome more in line with each person s contribution

logit estimates of strike incidence from canadian contract data logit estimates of strike incidence are made based on a unique and comprehensive data set of 2 437 collective agreements the appropriate level of aggregation since that is where bargaining occurs the results are interpreted through a theoretical framework emphasizing that strikes are more likely when the joint costs of using the strike mechanism are low relative to the cost of alternative mechanisms for achieving the same purposes such functions of strikes are to generate information elicit truth telling establish reputations provide catharsis and solve intraorganizational conflict

dynamic implications of absence behaviour this paper analyses the absence behaviour of workers in the context of a two period model the theoretical results that emerge highlight the potential benefits of analysing absenteeism within a multi time period model as opposed to a single time period model which has generally been adopted by the theoretical models of absenteeism to date workers are employed under a two period contract which is characterized by an experience rated sick pay scheme the theoretical results of the model indicate that if a worker faces such a sick pay scheme the theoretical results of the model indicate that if a worker faces such a sick pay scheme then the probability of absence in the current period is reduced the empirical analysis explores the absence rates observed from a set of workers who face an experience rated sick pay scheme the empirical results present some support in favour of the predictions which arise from the theoretical model

bargaining and the role of expert agents an empirical study of final offer arbitration abstract expert agents such as lawyers play a prominent role in conflict resolution yet little is known about how they affect outcomes we construct a model that permits us to estimate the influence of agents and test whether the parties in a dispute face prisoner s dilemma incentives using eighteen years of final offer arbitration data from new jersey we find the parties do significantly better when they retain agents and that the parties learn about this benefit over time however we also find that the gain to using an agent is fully offset when the opposing party also hires an agent since agents are costly this noncooperative equilibrium is pareto inferior

women and absenteeism health or economics full time workers in the united states lost 3 5 percent of scheduled work time due to unscheduled work absences in 1978 nearly 7 out of 100 workers experience at least one spell of absence a week however u s absentee rates have remained fairly constant over the past several years and are generally well below the rates of western europe for example west germany lost 11 percent of scheduled work time to unscheduled work absences holland lost 10 percent and italy lost 15 percent in 1972 73 part of the higher absentee rates in western europe is thought to be caused by the high prevalence of sick leave availability in these countries work loss from unscheduled absences is substantially higher among female workers than among male workers in the united states in may 1978 women lost 4 3 percent of scheduled work time compared to 3 1 percent for men absence incidence rates are also higher for women 8 6 percent of women workers experience a spell of absence during a typical work week compared to 5 4 percent of men workers the large majority of unscheduled work absences are due to illness and injury the average female worker lost 5 4 days from work for health reasons compared to 4 7 days for the average male worker in 1979 there have been several recent research efforts on the causes and consequences of worker absenteeism steve allen 1981 found evidence that observed differences in absentee rates between the sexes could be accounted for by differences in marginal earnings and the flexibility of the work schedule my 1978 study found that women generally lost fewer days from work than men for most common illnesses there has been little research to date on gender differences in work loss due to illness that takes into account differences in the occupational distribution of workers and differences in marginal earnings as well as variations in health status this paper reports on an empirical investigation of the determinants of gender differences in illness related absentee rates in this investigation labor market characteristics such as differences in earnings and occupational mix between men and women differences in health status and the impact of family are analyzed using a regression framework

arbitration and bargaining across the pacific this paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations the united states and japan besides comparing disputes in both locations we evaluate disputes between them while we find nominal differences between the countries we observe significant changes in both groups behavior when facing someone from the other country specifically americans seek larger profits when facing a japanese counterpart and japanese subjects settle more frequently with an american counterpart our results suggest that the literature on bargaining behavior across cultures paints an incomplete picture of international comparisons by failing to consider bargaining interactions

the effect of settlement stage on negotiated wage settlements in canada this paper analyzes the effect of the particular stage of wage settlement on the negotiated wage increase using micro data on canadian labor contracts between 1966 and 1975 the sample data base was divided into direct first stage bargaining mediation conciliation and work stoppage arbitration and structural wage equations were estimated for each set of data the results indicate that as negotiations move from direct bargaining to work stoppage labor market conditions measured by a vacancy rate become less important as an explanatory variable and price catch up becomes more important

equilibrium strategies for final offer arbitration there is no median convergence final offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement this procedure is modeled as a two person zero sum game of imperfect information in which the parties are assumed to know the probability distribution of the arbitrator s fair settlements and to make bids in an infinite strategy space that maximize their expected payoffs necessary and sufficient conditions for there to be local and global equilibria in pure strategies are derived and necessary conditions for mixed strategies in a particular case are found such equilibria when they exist in pure strategies represent bids which are symmetric about the median and for most common distributions are separated from one another by two or more standard deviations this finding suggests that final offer arbitration may not accomplish its avowed purpose of inducing the two parties to converge on what they perceive to be t

bias in salary arbitration the case of major league baseball this study analyses all baseball arbitration cases from 1985 90 to determine if decisions differ among ethnic groups unlike earlier arbitration analyses extensive controls for individual and team performance are used holding performance constant the results indicate that latin american players have 33 less chance and blacks 19 less chance than does a white player of winning a case these differences are not reflected by more risky salary demands by minority players and only marginally reflected by market salary practices toward minority players therefore bias appears to emanate from arbitrator utility functions

moral hazard and sickness insurance abstract we study if the replacement level in the swedish national sickness insurance which replaces foregone earnings due to temporary illnesses affects work absence behavior we use micro data and estimate the effects of a major reform whereby the replacement level during the first 90 days in each absence spell was reduced on work attendance to separate out the effect of the reform from any trend in work absence we distinguish between the implications on the incidence of work absence i e the frequency of spells and the duration of the spells we also use a regression discontinuity approach to estimate the effects on the prevalence of work absence finally we estimate elasticities with respect to the replacement level in the sickness insurance

how oecd countries subsidize oil and natural gas producers and modeling the consequences a review abstract since fossil fuel subsidies entail significant economic fiscal social and environmental costs more and more attention is being paid to phasing out fossil fuel subsidies the oecd has recently completed a report quantifying the amount of both producer and consumer subsidies for their member countries and some work has been implemented on analyzing the effects of consumer subsidy removal however there is hardly any investigation of the consequences of producer subsidies in this paper we focus on oil and gas producer subsidies of oecd countries and their effects first we describe the transfer mechanisms indicated by the oecd report for producer subsidies in order to recommend models to analyze the influence of removing producer subsidies we review upstream oil and gas models and provide a taxonomy for them from them we recommend the most appropriate models for each type of producer subsidy to model upstream decision making our contribution in this paper is to categorize the upstream models we have found compare their main features as well as recommending best in class models for analyzing the effects of each type of upstream producer subsidy

a variant of the hubbert curve for world oil production forecasts abstract in recent years the economic and political aspects of energy problems have prompted many researchers and analysts to focus their attention on the hubbert peak theory with the aim of forecasting future trends in world oil production in this paper a model that attempts to contribute in this regard is presented it is based on a variant of the well known hubbert curve in addition the sum of multiple hubbert curves two cycles is used to provide a better fit for the historical data on oil production crude and natural gas liquid ngl taking into consideration three possible scenarios for oil reserves this approach allowed us to forecast when peak oil production referring to crude oil and ngl should occur in particular by assuming a range of 2250 3000 gigabarrels gb for ultimately recoverable conventional oil our predictions foresee a peak between 2009 and 2021 at 29 3 32 1 gb year

productivity growth in pre 1990 mongolian agriculture spiralling disaster or emerging success the reasons for the spectacular collapse of so many centrally planned economies are a source of ongoing debate in this paper we use detailed farm level data to measure total factor productivity tfp changes in mongolian grain and potato farming during the 14 year period immediately preceding the 1990 economic reforms we measure tfp growth using stochastic frontier analysis sfa and data envelopment analysis dea methods our results indicate quite poor overall performance with an average annual tfp change of 1 7 in grain and 0 8 in potatoes over the 14 year period however the pattern of tfp growth changed substantially during this period with tfp growth exceeding 7 per year in the latter half of this period this suggests that the new policies of improved education greater management autonomy and improved incentives which were introduced in final two planning periods in the 1980s were beginning to have a significant influence upon the performance of mongolian crop farming crown copyright c 2002 published by elsevier science b v all rights reserved

absenteeism in a medium sized manufacturing plant 1991 absenteeism in a medium sized manufacturing plant applied economics vol 23 no 1 pp 161 166

a comparison of conventional final offer and combined arbitration for dispute resolution two widely used forms of arbitration are conventional arbitration in which the arbitrator makes an unconstrained settlement choice and final offer arbitration in which the arbitrator must choose between disputants final offers under an innovative as yet unused approach called combined arbitration if the arbitrator s notion of a fair settlement lies between the disputants final offers final offer arbitration rules are used otherwise conventional arbitration rules are used theoretically by combining the risks that the two standard forms of arbitration pose for disputants who do not voluntarily settle combined arbitration should generate convergent final offers the results of this controlled laboratory study show however that dispute rates are highest in combined arbitration and lowest in conventional arbitration these results challenge the theoretical predictions for combined arbitration as well as claims that final offer arbitration should reduce disputes compared to conventional arbitration the results are however consistent with a simple theory of disputant optimism

public sector earnings and the extent of unionization many studies have examined the influence of union density union members as a percentage of all workers on earnings in the private sector but few such studies have looked at the public sector using data from the 1991 current population survey this study estimates the determinants of earnings for state and local government employees in both the union and nonunion sectors the extent of public sector unionization appears to be positively correlated with earnings for both state and local government workers and for those covered and not covered by collective agreements although the effect for non covered employees is smaller than that for covered employees both effects are larger than those typically found in similar estimates for the private sector the authors also find that bargaining structure has some influence on earnings with the most consistent effect being a positive influence of arbitration on the earnings of local government workers

the relationship between uncertainty the contract zone and efficiency in a bargaining experiment research on bargaining suggests that the efficiency of bargaining is related to the size of the surplus to be divided and to uncertainty about the opponent we conducted a bargaining experiment which manipulated both of these factors we find that the presence of uncertainty decreases bargaining efficiency while the effect of contract zone size depends on whether there is uncertainty or certainty

distinguishing characteristics of degrees of success and failure in economic sanctions episodes this paper uses 104 episodes from the hufbauer et al 1985 1990 dataset to examine the correlates of classes of outcomes of economic sanctions the parsimonious equations presented identify the characteristics of sanctions episodes conducive to success rather than marginal success and the characteristics productive of failure rather than marginal failure failure is most likely if there is significant third party assistance to the target and if the pre existing trade linkage between sender and target is small success is most easily achieved when the objective is not classified as modest and when pre sanction relations between sender and target are cordial or neutral the equations presented overcome data and methodological flaws of earlier studies exhibit reasonable predictive accuracy and satisfy a battery of tests of statistical significance hypothesized coefficient sign goodness of fit high likelihood and informational efficiency

how much can co2 emissions be reduced if fossil fuel subsidies are removed abstract this paper analyzes consumers price elasticities of demand for fossil fuels and how a reduction of fossil fuel subsidies can lead to important reduction in co 2 emissions for various groups of countries that have relatively high fossil fuel subsidies and notably on diesel including countries in the middle east and north africa mena these countries continue to maintain significant levels of fuel subsidies with iran and saudi arabia being the largest contributors to co 2 emissions this paper illustrates that fuel price policy reforms by these countries would be an important instrument for both climate and economic policies we estimate that a reduction in subsidies to both gasoline and diesel by about 20 us cents per liter will lead to significant decreases in co 2 emissions both in the mena region and globally in iran for example the reductions could be up to 90 and 50 of current emissions generated from diesel and gasoline consumption respectively and for saudi arabia approximately 70 and 40 respectively

union leaders as experts wage bargaining and strikes with union wide ballot requirements to avoid strikes and to curb labour militancy some governments have introduced legislation stating that union leadership as well as wage offers should be decided through union wide ballots this paper shows that members still have incentives to appoint militant union leaders if these leaders have access to information critical for the members voting decisions furthermore conflicts may arise in equilibrium even though the contract zone is never empty and there is an option to resolve any incomplete information ballot requirements hence preclude neither militant union bosses nor inefficient conflicts

an experimental comparison of dispute rates in alternative arbitration systems this paper reports the results of a systematic experimental comparison of the effect of alternative arbitration systems on dispute rates the key to our experimental design is the use of a common underlying distribution of arbitrator fair awards in the different arbitration systems this allows us to compare dispute rates across different arbitration procedures where we hold fixed the amount of objective underlying uncertainty about the arbitration awards there are three main findings first dispute rates are inversely related to the monetary costs of disputes dispute rates were much lower in cases where arbitration was not available so that the entire pie was lost in the event of a dispute this confirms the empirical importance of the so called chilling effect on bargaining that has been conjectured is produced by the adoption of arbitration systems second the dispute rate in a final offer arbitration system is at least as high as the dispute rate in a comparable conventional arbitration system contrary to the usual argument we find no evidence that final offer arbitration eliminates the chilling effect third dispute rates are inversely related to the uncertainty costs of disputes dispute rates were lower in conventional arbitration treatments where the variance of the arbitration award was higher and imposed greater costs on risk averse negotiators our results can also be interpreted as providing tentative evidence that the negotiators were risk averse on average finally we find general agreement between the dispute rates in our experiment and dispute rates found in the field in comparable settings

reinterpreting arbitration s narcotic effect an experimental study of learning in repeated bargaining field evidence suggests that arbitration increases negotiation dispute rates we study repeated bargaining in a laboratory to understand the reasons why our results represent a reinterpretation of an explanation known as the narcotic effect the standard interpretation assumes that the probability of dispute without arbitration is constant across negotiations but field evidence suggests that experienced bargainers have fewer disputes to properly assess arbitration s impact we compare bargainer learning with and without arbitration under otherwise comparable laboratory conditions and develop a model to measure learning we find strong evidence that learning occurs in both cases but is slower with arbitration journal of economic literature classification numbers c78 c92 d77 j52 q 1998 academic press

household welfare implications of fossil fuel subsidy reforms in developing countries abstract with over 200 countries reaching an agreement with the stated aim of restricting global warming to well below 2 c above pre industrial levels the most comprehensive climate change agreement was recently signed though most of the hard work lies ahead it marks an important first step for the collective global community to address climate change fossil fuels continue to remain one of the largest contributors to greenhouse gas emissions and for many developing countries high levels fossil fuels continues to enable an overconsumption of fossil fuels given the sensitivity of governments to subsidy reforms this study examines the household welfare implications of the removal of fossil fuel subsidies it finds that while welfare implications are unambiguously positive for government the results are mixed for private households although in an overwhelming majority of cases the results are positive however even in the cases where the welfare implications are negative for private households we find that it is possible for governments to carry out the reforms in such a way as to be welfare improving to households incomes by compensating them with some of the fiscal savings gained from the subsidy reform

gone fishing reported sickness absenteeism and the weather i introduction the principal agent problem of contracting employee work effort that is imperfectly monitored arises in a number of areas of economic theory including models of remuneration by seniority lazear 1979 involuntary unemployment e g shapiro and stiglitz 1984 performance based pay macleod and malcomson 1998 and labor hoarding depken redmount and snow 2001 given the importance of this mechanism in the theoretical work the empirical research on the agency problem is remarkably scant in part this reflects the limited availability of personnel data as baker and holmstrom argue in their review article internal labour markets too many theories too few facts 1995 but more fundamentally it reflects the inherent difficulty of empirically capturing the employee effort levels that underlie the models using direct measures of employee or firm level productivity is unquestionably the preferred approach but these measures are notoriously problematic and the studies that use them tend to be case studies introducing external validity issues it is also unlikely to isolate the type of malfeasant shirking behavior that concerns variants of the models where the employee effort decision entails disciplinary risk to inform employee incentives to engage in malfeasant behavior economists have relied on two measures employee disciplinary rates e g cappelli and chauvin 1991 ichino and maggi 2000 and absenteeism rates e g arai and thoursie 2005 bradley green and leeves 2007 ichino and riphahn 2005 the difficulty is that disciplinary rates capture only shirking activity that is identified by employers not that which goes undetected while reported absenteeism particularly sickness absenteeism rates may be entirely legitimate one can therefore never be sure whether differences in these rates across workers facing different shirking costs reflect actual shirking activity as opposed to differences in employers willingness or ability to detect and punish shirkers or differences in employee health that may be correlated with these costs in this paper we identify a different type of shirking activity that potentially addresses both of these shortcomings employees misreporting health in order to exploit weather conditions favorable to high utility outdoor recreation 1 we begin by considering a shirking model of sickness absenteeism in which employees marginal utility of outdoor leisure is increasing in the interaction of two state dependent parameters health and outdoor weather quality the intuition being that ideal weather conditions for engaging in outdoor recreation are valued more when one is physically and perhaps also mentally healthy this assumption leads to two main propositions first increases in sickness absenteeism associated with marginal improvements in weather quality reflect the decisions of the inframarginal workers those workers who in the absence of the weather improvement would be present at work who are the healthiest implying an increase in absenteeism that is unambiguously illegitimate second comparing across workers marginal weather improvements should have the largest impact on sickness absenteeism where shirking costs are highest the reason is that where existing incentives to misreport health are the weakest such as where sick pay is not offered or job protection is weak existing sickness absenteeism levels will be lowest and the inframarginal workers will be the healthiest thereby benefitting most from the weather improvement we examine the empirical relevance of these propositions using a two step approach first we construct an index of weather preferences by linking temperature relative humidity precipitation wind speed and cloud cover data to time use data identifying the weekend and weekday evening outdoor recreational activities of employees with regular daytime work schedules we then examine the empirical relation between the resulting index of the recreational quality of the weather hereafter referred to simply as weather quality and the incidence of short term spells of sickness absenteeism reported in survey data comparing the magnitude of this relation across workers facing different levels of sick pay job protection and job finding rates

extraction costs and the economics of nonrenewable resources the study questions the fundamental assumption of the standard aggregate exploration extraction model of nonrenewable resources that extraction costs and the level of reserves are inversely related it also raises questions about the model s conclusions regarding exploration incentives and the valuation of reserves an empirically tested disaggregate model is presented that suggests that exploration activity occurs from firms attempting to balance marginal extraction plus user costs at the intensive and extensive margins exploration is carried out until the marginal discovery cost of a deposit equals its present asset value and a u shaped price path is indicated

tax policy can change the production path a model of optimal oil extraction in alaska we model the economically optimal dynamic oil production decisions for seven production units fields on alaska s north slope we use adjustment cost and discount rate to calibrate the model against historical production data and use the calibrated model to simulate the impact of tax policy on production rate we construct field specific cost functions from average cost data and an estimated inverse production function which incorporates engineering aspects of oil production into our economic modeling producers appear to have approximated dynamic optimality consistent with prior research we find that changing the tax rate alone does not change the economically optimal oil production path except for marginal fields that may cease production contrary to prior research we find that the structure of tax policy can be designed to affect the economically optimal production path but at a cost in net social benefit

using the law to change the custom the custom often acts as a powerful hindrance to equity increasing changes in this paper we present a simple model of legal dualism in which a progressive legal reform can under certain conditions shift the conflicting custom in the direction intended by the legislator formal law then acts as an outside anchor that exerts a magnet effect on the custom we also characterize the conditions under which a moderate reform performs better than a radical one in improving the welfare of the disadvantaged sections of the population we illustrate our insights using examples on inheritance marriage and divorce in sub saharan africa and india

arbitration and conflict resolution in labor management bargaining compulsory arbitration is frequently employed to resolve labor management bargaining disputes when the union is legally prohibited as are for example many public employees unions from striking in this form of arbitration an arbitrator is empowered to impose a settlement on the bargaining parties if their negotiations break down various compulsory arbitration schemes are now in use in many states including alaska connecticut iowa maine massachusetts michigan minnesota nebraska nevada new jersey new york oregon pennsylvania rhode island south dakota washington wisconsin and wyoming but there has been little formal analysis of the various schemes that are employed in these states and as a result the basis available for choice among them remains incomplete this paper classifies the theoretical problems that must be resolved before a more careful comparison of these compulsory arbitration schemes is possible provides a brief overview of the work that has been done on each of these problems and indicates what appear to be the most promising directions for future research along these lines four kinds of compulsory arbitration are considered here conventional ccmpulsory arbitration cca in which the arbitrator imposes a settlement of his unrestricted choice if negotiations break down finaloffer arbitration foa in which the arbitrator must choose without compromise between bargainers final offers if negotiations break down multiple foa a variant of foa originally suggested by donn and on occasion issue by issue foa which is like simple foa except that the arbitrator is permitted to fashion his settlement from the components of bargainers final offers cca simple foa and issue by issue foa are already in widespread use while multiple foa which is similar but not identical to a scheme used in eugene oregon has been suggested by donn and my 1979a article as an improvement on simple foa in the literature of industrial labor relations compulsory arbitration schemes have been judged primarily by three criteria the quality of the arbitral settlements they generate when negotiations break down their freedom from bias which is usually defined as the distortion of negotiated settlements away from what they would have been in ordinary bargaining with both strikes and lockouts permitted and the extent to which they create environments conducive to negotiated settlements an integrated analysis in which bargainers choosing their stategies consider the effects of their actions on negotiated and arbitral settlements as well as on the probabilities of these possibilities would be ideal but in beginning the study of the effects of arbitration schemes it is convenient and probably not misleading to simplify the problem by dividing it thus i shall propose separate analyses of the quality of arbitral settlements under noncooperative behavioral assumptions the bias of negotiated settlements under cooperative assumptions and the probability of a negotiated settlement under a blend of both noncooperative and cooperative assumptions each section of this paper in turn discusses existing work that is relevant to judging arbitration schemes by one of the above three criteria university of california san diego this research was supported by the national science foundation many of the observations made here evolved in discussions and correspondence with clifford donn who by no means agrees with all or even most of them i am grateful to him and to joel sobel and participants in a workshop presentation at the university of chicago who also made helpful comments

strikes and wages a test of an asymmetric information model this paper describes a simple model of labor disputes based on the hypothesis that unions use strikes to infer the profitability of the firm the model posits the existence of a negatively sloped resistance curve between wages and strike duration in addition it offer a series of predictions relating wage and strike outcomes to changes in the expected profitability of the firm and changes in the alternative opportunities of striking workers these implications are tested using data on wage outcomes strike probabilities and strike durations for a large sample of collective bargaining agreements

a proposal for using incentive precommitments in public enterprise funding abstract among the central problems of less developed countries ldcs is the poor performance of their public enterprises pes and the seemingly limited ability of governments and other agencies to improve this performance this paper proposes that project agencies be induced as a part of the initial financing of pes to undertake specific types of precommitments a precommitment to liquidate the project if its ex post performance falls below some threshold level and a precommitment to link a non negligible part of employee compensation to actual performance our proposal is not guaranteed to improve pe performance because there are no perfect solutions to what is inherently a politically difficult problem nevertheless we argue that as long as public enterprises exist independent of whether this is a good idea or not a precommitment to use performance based incentives is likely to improve their performance we discuss the primary sources of pe losses compare their probable magnitudes and explain how various precommitments are likely to ameliorate such losses our proposal is aimed at stimulating more thought on this subject and is addressed to a broad audience

institutions freedom and technical efficiency the impact of institutions on economic performance is currently the subject of much research in this study we use panel data to estimate a stochastic production frontier and the sources of inefficiency for a broad set of countries a maximum likelihood procedure is used to estimate the parameters for the stochastic production frontier and the determinants of inefficiency simultaneously our results show that institutions that promote greater economic freedom in turn promote efficiency

the relative efficiencies of market and planned economies are planned economies systematically more or less productive than market economies this question provoked heated intellectual debate since the time of hayek 11 keynes 16 lange 19 lange and taylor 20 and lerner 22 the collapse of the communist systems of east europe since 1989 closed the debate planned economies were without doubt less efficient in utilizing economic resources than market economies but how much less efficient this question is of obvious scientific interest but it has not been answered some work addressing the broad question of comparative efficiency has been done by bergson 4 5 6 marer 25 26 moroney 28 and others all indicate comparatively lower efficiency in planned economies but none addresses the question by how much our contribution here is to answer this question using a novel methodology we estimate aggregate frontier production functions for two groups of countries 7 centrally planned economies in east europe and 17 predominantly market economies in west europe estimating frontier production functions enables two types of comparisons that have not

dynamic firm behavior and regional deadweight losses from a u s oil import fee this paper analyzes the national and regional efficiency aspects of a 5 per barrel fee on crude oil imported into the united states the emphasis of the paper is twofold firstly a dynamic model of firm behavior capturing explicitly both expectations formation and resource nonrenewability is used to assess the impact of the fee on domestic firm behavior and secondly the regional breakdown of the producer and consumer surplus changes tariff revenues and deadweight losses or gains is performed by taking explicit account of stock ownership in oil producing and oilconsuming corporations and consumption by end use sector the import fee is a politically contentious issue but one that refuses to go away in political circles the perceived benefits of the fee are usually seen as increased energy security and aid to a beleaguered domestic oil and gas industry perceived drawbacks are usually inflation and regional inequities the last point is the political downfall of the tariff producing states are seen to gain from the higher prices brought on by the tariff and consuming states are seen to lose representatives from states with little or no production and this of course covers most states are hard pressed to sell the idea to constituents this paper thus deals with two of the most important questions from a policy perspective the regional incidence of the tariff and its impact on domestic output in a related paper 20 i discuss the economic rationales for an oil import fee i find that any optimal tariff arguments based on u s monopsony power in the world oil market are not valid in today s market estimates show an import supply curve of approximately infinite elasticity and thus an optimal tariff near zero i dispense with the energy security rationale for a tariff as well arguing that any risk of a disruption of imports in the future and that risk may be small in today s market is best handled with other policy tools such as government owned or subsidized stockpiles these conclusions imply that a tariff would impose deadweight losses on the u s economy by encouraging overproduction of domestic petroleum resources and underconsumption of petroleum imports how much overproduction results from the tariff is the focus of section ii below a

collective bargaining in the public sector comment in a recent paper janet currie and sheena mcconnell 1991 hereafter cm provide evidence from the canadian public sector suggesting that requiring binding wage arbitration as opposed to granting the right to strike reduces dispute costs but increases wage costs disputes are defined as either an arbitration or a strike this leads them to conclude that compulsory arbitration pareto dominates other forms of legal structure both parties could potentially be made better off from the reduction in dispute costs associated with compulsory arbitration and those responsible for designing collective bargaining legislation face a trade off between reducing dispute costs and changing the division of the rent p 714 they base these important policy conclusions on their empirical evidence on the following relationships