What is it about?

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. More research is needed to find out if the conventional wisdom really is accurate. This article analyzes data from Major League Baseball to test whether voluntarily-negotiated agreements produce better long-run relationships than third-party imposed resolutions. The evidence suggests that they do, but the settlement method does not affect on-field performance.

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Why is it important?

Disputes can be resolved in different ways. Does this matter? This research is valuable because it helps us see that the answer to this question is "yes." Moreover, the results suggest that that the imposed, non-consensual dispute resolution methods harms the relationship and negatively affects behaviors that are hard to observe. But at the same time, career concerns and loyalty to co-workers causes a player to continue to publicly perform at his usual level. This implies that 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.

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This page is a summary of: Are Voluntary Agreements Better? Evidence from Baseball Arbitration, ILR Review, July 2016, SAGE Publications, DOI: 10.1177/0019793916661305.
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