We write this note as two professors with divergent views and a common goal. One of us crosses picket lines and the other doesn’t. Yet it is easy for us to agree that the strike is in neither party’s interest. What can we do about it?
During a strike, people want to know which side is being more reasonable. The strike imposes huge costs on “civilians.” The support of those civilians — students, faculty, community, and alums–will make a big difference to how this impasse ends. In deciding whether to support the union or management, people rightly want to know who’s being reasonable. People are less likely to throw their support behind the side that through its negotiation behavior is more to blame for the bargaining impasse.
The problem is that both sides will claim that the fault lies not in the stars, but in the other party. Most of us find it hard to sort out all the competing claims. This is what leads to our proposed solution. Let an independent third party evaluate the offer of both sides and simply announce which is more reasonable. This party does not suggest alternatives or even meditate. He or she simply announces which side is being more reasonable (or less unreasonable). We’d even go one step further. The arbitrator could go back and offer a running tally of which side has had the more reasonable offer on the table for the last year.
This mechanism is inspired by the arbitration system used in baseball where the two sides make a final offer to an arbitrator who then chooses one or the other as binding contract. This all-or-nothing choice disciplines each side to make a more reasonable offer.
Baseball arbitration wouldn’t work at Yale because neither side would be willing to take the all-or-nothing gamble that arbitrator would choose the other side’s offer.
But some of the beneficial disciplining effects of baseball arbitration can be obtained in a nonbinding system where third-party sympathies will turn on the relative reasonableness of the bargainers. Imagine how differently you’d feel about the strike if a neutral third party told you that for the last three quarters that the unions had the more reasonable offer on the table.
The arbitrator could also estimate the dollar cost or value of every offer made by each side. This costing out of offers would allow the public to see in a single graph how far apart the parties have been at various points of time and degree to which each side has been willing to make concessions. And the graph could even include, for various points in time, the arbitrator’s determination of relative reasonableness of the offers.
This kind of information would provide valuable information to both the disputants and to third parties. Support for Yale or the unions increasingly turns on the merits of the dispute. Thus, publicizing information on relative reasonableness is likely to drive each side to make offers that are more serious and more timely in the negotiations. Having the disputants compete on reasonableness is a great way to avoid the tragic inefficiencies of work stoppages.
This is also the kind of mechanism that both sides could agree to — right now to help settle the current strike, but also as part of a prospective agreement to avoid further strikes. The unions, which have consistently offered to submit the dispute to binding arbitration, would be hard-put to object to neutral third-party evaluation.
As Yale administrators fervently believe that Yale has been the only party that has been willing to put reasonable offers on the table, they should also agree. Yale thinks that if this were baseball “final offer” arbitration, it would win hands down.
Nonbinding interim offer arbitration lets each sides demonstrate their bone fides to the public without binding themselves unalterably to the arbitrator’s assessment.
Mercutio, while dying, famously called for “A plague o’ both [sides’] houses.” But those of us among the living often have to choose which side to support. Do we cross the line or not? As the Yale strike enters its second week, many people want to know, “Who’s more to blame?”
Ian Ayres is the Townsend Professor at Yale Law School and Barry Nalebuff is the Steinbach Professor at the Yale School of Management. Together they are the authors of the forthcoming book, “Why Not?”.