Douglas H. Blair

Labor Union Objectives and Collective Bargaining

We consider a model oflabor union behavior in which workers make decisions about wages and employment by simple majority rule. We show that under general conditions such a union has a well-behaved objective function, different from those previously postulated in the literature. We then show that the unions majority preferences generally lack a von Neumann-Morgenstern utility representation and thus cannot be inserted into traditional bargaining models. We then develop and characterize the solutions to a new bargaining model that is consistent with the structure of union preferences. Several comparative-statics results are presented.

Unbundling the Voting Rights and Profit Claims of Common Shares

We analyze a model of a hostile takeover attempt in which shareholders are free to sell common-share voting rights as well as the shares themselves. Without taxation, only welfare-improving take-overs succeed. Allowing vote sales has no effect on the success of attempted takeovers or the profits of incumbent management or raiders. When taxes are levied, however, an inefficiently small number of value-increasing takeovers succeed if vote sales are prohibited. Allowing vote sales facilitates such takeovers and raises welfare. With taxation, incumbents would never prefer to defend against take-overs by purchasing votes, but raiders might well prefer this method.

Labour union objectives and collective bargaining

Labour economists have long been interested in modelling the collective bargaining process, but the development of such models has proceeded slowly. Two major stumbling blocks have impeded progress. The first is the problem of specifying the objectives of a labour union. The second problem is modelling how collective bargaining resolves conflicts between the objectives of the union and the employer. These problems are intimately related because the formulation chosen for union preferences plays a critical role in determining how bargaining can be modelled. In this paper we report progress on both froms. We construct a model of collective bargaining that is not only empirically tractable but also rigorously and explicitly grounded in maximizing behaviour by union members.

Electoral College reform and the distribution of voting power

ConclusionThe empirical findings of this essay suggest that suburban native whites, the most economically advantaged of the nine demographic groups, also wield the most political power in the selection of the president under either of two power measures. They further indicate that this power would be diminished by abolition of the Electoral College. Blacks, on the other hand, the least economically advantaged of the groups, are shown to have below-average voting power under the Electoral College procedure according to each index; they would gain power under direct election. It would seem to be no very strenuous normative leap for an egalitarian to conclude that electoral reform is in order.Three caveats should be borne in mind while taking this plunge, however. The first concerns the robustness of the model. Most of the simplifications underlying the coalition-formation model have already been pointed out. At least one, however, has not: the assumption implicit in the Rae-index calculations that candidate behavior, and hence group voting patterns, would not be appreciably affected by changes in the method of election. Secondly, even if this model succeeds in capturing each groups current voting behavior, it is hazardous to forecast with it political realities over the likely constitutional life of any reform amendment. Issues and alliances will doubtless change, as will the distribution of demographic groups across states.Finally, Bickel has defended the Electoral College on the ground that its supposed bias in favor of urban and minority groups counterbalances the “interests that have a more rural, nativist, and Protestant orientation ... [which] have tended to dominate Congress.” (1971, p. 7.) Can we simply insert into Bickels argument our evidence that minority groups are advantaged by direct election and invert his conclusion on the same balance-of-power grounds? We cannot do so with certainty, at least without undertaking a parallel investigation of the biases of Congress, a task which is doubtless vastly more complex than the undertaking reported here.

Subjective evaluations of n-person games

Using an axiomatization of subjective expected utility due to Fishburn, we characterize a class of utility functions over a set of n-person games in characteristic-function form. A probabilistic value is defined as the expectation of some players marginal contribution with respect to some probability measure on the set of coalitions of other players. We decribe conditions under which a utility function on the set of n-person games is a probabilistic value; we prove as well an analogous result for simple games. We present additional axioms that characterize the semivalues and, in turn, the Shapley and Banzhaf values.

The primary-goods indexation problem in Rawls's theory of justice

Rawlss Difference Principle holds that basic social institutions are just if they maximize the worst-off individuals potential welfare, which depends on the vector of amounts of “primary goods.” As Rawls recognized, the multiplicity of primary goods poses an index number problem. This paper uses the machinery of social choice to characterize the class of procedures for aggregating quantities of several primary goods into a composite ordinal index that are consistent with Rawlss analysis. Only very simple and unattractive aggregation methods in which the various primary goods play roles of radically different magnitudes are compatible with Rawlss argument.

Polychromatic Acyclic Tours in Colored Multigraphs

We present two graph-theoretic propositions in this paper that provide the basis for a result paralleling Arrow’s (Arrow, K. J. 1963. Social Choice and Individual Values. 2nd ed. Yale University Press, New Haven.) impossibility theorem.

Rationality and Social Choice

Are there “consistent” procedures for aggregating individuals’ preferences into collective judgments? This question was first posed formally more than thirty years ago by the economist Kenneth J. Arrow, now of Stanford University. After listing intuitively appealing properties that any preference aggregation procedure should satisfy, Arrow proved that these properties were incompatible: no procedure satisfying all of Arrow’s axioms can be found, not for lack of ingenuity, but because none exists. Consistency is impossible.1