consortiums

PROJECT 4

SAILOR MARINE CAREER MANAGEMENT SYSTEM

Bargaining, Fairness, Information and the Labor Allocation Problem

Mark Van Boening
School of Business Administration,
University of Mississippi

                             Paul Pecorino
                    University of Alabama

                  Proposed Grant $148,922

Abstract:
Bilateral bargaining is used extensively by the armed forces for labor allocation.

An important example is the assignment of Navy billets. This research proposes a systematic study of bargaining to help facilitate a more efficient allocation of resources. This study will especially focus on issues relating to fairness in bargaining and to the role asymmetric information. The objective is to identify which conditions yield assignments that are in the interest of the individual sailor and the U.S. Navy. Duration of project is two years (FY01-02).
A significant body of economic research addresses bilateral bargaining. Bargaining failure implies that mutually beneficial gains are lost or left unrealized. Consequently, both parties could be made better off. Thus it is important to identify those negotiation mechanisms that exploit these otherwise lost opportunities, and that yield efficient allocation of resources. The novel approach of this research is to use laboratory methods to identify (a) conditions that yield efficient bargaining outcomes, (b) how informational asymmetries affect behavior, and (c) how issues of fairness affect behavior. Previous research has investigated some aspects of these issues, but no study has systematically researched these three important issues. The objective is to help identify those conditions or mechanisms that could ultimately be used to efficiently allocate manpower resources: placing the right sailor in the right job at the right time.