•A synthetic measure to determine concession period and minimum revenue guarantee.•Imperfect information bargaining for the equilibrium return rate on investment.•Effects of the probability of ...achieving the equilibrium return rate on investment.•The concession period decision range is sensitive to change in the concession price.
Public–private partnership (PPP) schemes show strong capability in delivering infrastructure projects. One challenge in designing PPP contracts is optimising the length of the concession period and level of the minimum revenue guarantee (MRG) to satisfy both public and private parties’ interests. Existing research excludes interaction between the concession period and MRG, but a method that can determine their values simultaneously is needed. This study fills the research gap by proposing a synthetic measure to determine the values of the concession period and MRG. An imperfect information bargaining model is created to find the equilibrium return rate on investment. To achieve the equilibrium of the bargaining game, the required length of the concession period and level of the MRG are calculated based on Monte Carlo simulation and real option analysis. Project QJ is created as a numerical example to verify the applicability of the proposed method. The outcome shows the proposed determination process identifies the optimal length of the concession period and level of the MRG. The length of the concession period is inversely proportional to the level of the MRG and this correlation is influenced by the probability of achieving the equilibrium return rate on investment. When this probability equals 70%, an MRG is not required once the concession period exceeds 24 years. The results also show the concession period decision range is sensitive to change in the concession price.
Abstract
In this article, we estimate urban wage premia (UWPs) in Italy, with its economy characterized by the interplay between collective wage bargaining and spatial heterogeneity in the cost of ...living. Our dataset for the 2005–2015 period exploits detailed information on the universe of workers in the private sector and price measures disaggregated at a fine spatial level. For employees under collective bargaining, we find a zero UWP in nominal terms and a negative UWP in real terms. When we turn to consider various groups of self-employed workers, who are not covered by national labor agreements, we instead find a positive nominal UWP and no real wage penalties.
There is growing evidence that firm-specific pay premiums are an important source of wage inequality. These premiums will contribute to the gender wage gap if women are less likely to work at ...high-paying firms or if women negotiate (or are offered) worse wage bargains with their employers than men. Using longitudinal data on the hourly wages of Portuguese workers matched with income statement information for firms, we show that the wages of both men and women contain firm-specific premiums that are strongly correlated with simple measures of the potential bargaining surplus at each firm. We then show how the impact of these firm-specific pay differentials on the gender wage gap can be decomposed into a combination of sorting and bargaining effects. We find that women are less likely to work at firms that pay higher premiums to either gender, with sorting effects being most important for low- and middle-skilled workers. We also find that women receive only 90% of the firm-specific pay premiums earned by men. Importantly, we find the same gender gap in the responses of wages to changes in potential surplus over time. Taken together, the combination of sorting and bargaining effects explain about one-fifth of the cross-sectional gender wage gap in Portugal.
This work investigates the problem of negotiations between producers and reverse-logistics (RL) suppliers for cooperative agreements under government intervention. Utilizing the asymmetrical Nash ...bargaining game with uncertainties, this work seeks equilibrium negotiation solutions to player agendas. Analytical results indicate that financial intervention by a government generates a significant effect on the relative bargaining power of green supply chain members in negotiations. Over intervention by a government may result in adverse effects on chain members’ profits and social welfare. Furthermore, a bargaining framework underlying the duopoly–oligopoly context may contribute to a negotiation outcome most profitable for green supply chain members.
•We revisit the relationship between collective bargaining agreement (CBA) restrictiveness and student achievement.•We build on prior, cross-sectional work by controlling for fixed and time-varying ...confounders.•Our results demonstrate a negative bias in the naïve pooled OLS estimates of CBA restrictiveness on student achievement.•When controlling for fixed and time-varying confounders, the relationship is persistently negative and small, or null.•These results extend to specific CBA subareas and to subgroups of students.
This paper revisits the relationship between teacher collective bargaining agreements (CBAs) and student achievement. Using a district-level dataset of California teacher CBAs that includes measures of overall and subarea contract strength linked to district-level panel data, we build on prior work by controlling for unobserved fixed and time-varying confounders. This study demonstrates that naïve pooled OLS estimates of student achievement on overall CBA strength are larger and more negative than lagged achievement and within-district estimates, signifying a negative bias in the naïve levels models. When controlling for time invariant and time-varying unobservables, the relationship between CBA strength and student achievement is persistently negative and small, or null, but never significantly positive. This relationship extends to specific CBA subareas and to subgroups of students. These findings have important implications for new reforms designed to weaken teacher collective bargaining rights.
In this article, we document and discuss salient features of collective bargaining systems in the OECD countries, with the goal of debunking some misconceptions and myths and revitalizing the general ...interest in wage setting and collective bargaining. We hope that such an interest may help close the gap between how economists tend to model wage setting and how wages are actually set. Canonical models of competitive labor markets, monopsony, and search and matching all assume a decentralized wage setting where individual firms and workers determine wages. In most advanced economies, however, it is common that firms or employer associations bargain with unions over wages, producing collective bargaining systems. We show that the characteristics of these systems vary in important ways across advanced economies, with regards to both the scope and the structure of collective bargaining.
The German Model of Industrial Relations Jäger, Simon; Noy, Shakked; Schoefer, Benjamin
The Journal of economic perspectives,
10/2022, Volume:
36, Issue:
4
Journal Article
Peer reviewed
Open access
We give an overview of the “German model” of industrial relations. We organize our review by focusing on the two pillars of the model: sectoral collective bargaining and firm-level codetermination. ...Relative to the United States, Germany outsources collective bargaining to the sectoral level, resulting in higher coverage and the avoidance of firm-level distributional conflict. Relative to other European countries, Germany makes it easy for employers to avoid coverage or use flexibility provisions to deviate downwards from collective agreements. The greater flexibility of the German system may reduce unemployment, but may also erode bargaining coverage and increase inequality. Meanwhile, firm-level codetermination through worker board representation and works councils creates cooperative dialogue between employers and workers. Board representation has few direct impacts owing to worker representatives’ minority vote share, but works councils, which hold a range of substantive powers, may be more impactful. Overall, the German model highlights tensions between efficiency-enhancing flexibility and equity-enhancing collective action.
Anbarcı (2001) presented a modification of the “divide the dollar” game, in which equal division is obtained by iterated removal of strictly dominated strategies. I extend his mechanism to a general ...Nash demand game and show that it implements the Nash bargaining solution.
•I generalize Anbarcıś (2001) DD∗ game.•The result applies to general Nash demand games.•The Nash bargaining solution is implemented.•The solution concept is iterated strict dominance.
The use of an incomplete information game model to explore the strategic characteristics of the carrot and stick approach to coercive diplomacy shows that the dynamics of this manipulative bargaining ...tactic are much more nuanced than standard atheoretical accounts suggest. One unexpected finding is that when information is incomplete, there always exists a deterrence equilibrium under which no attempt is made to overturn the status quo. An all-out conflict or an unsuccessful fait accompli is also possible, but only when information about preferences is not common knowledge. Incomplete information, then, is a double-edged sword, sometimes enhancing the prospects for peace and at other times making conflict more likely. We use a special case of the Carrot and Stick Game model to shed theoretical light on the Munich crisis of 1938, a manufactured crisis if there ever was one. Hitler’s last-minute about-face was motivated by his newfound belief that the British, French, and Czechs intended to resist his planned military invasion of the Sudetenland and his preference to avoid an all-out war. While his preference was unchanged in 1939, his beliefs were not; as our model suggests, the consequences were more than predictable.
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