In search of value-for-money in collective bargaining: an analytic-interactive mediation process

In this paper we introduce an analytic-interactive mediation approach to facilitate conflict resolution in collective bargaining. Based on field observations of labor-management negotiations in the German railway industry, we develop an approach which combines human mediation with IT-based contract modeling. The system addresses two shortcomings of existing negotiation support systems (NSS) for collective bargaining: first, limited information exchanges to computer-based channels and, second, a lack of frameworks, which reflect existing cognitive schemes of labor-management negotiators beyond standard utility vs. utility approaches. The negotiation modeling approach of the system introduced in this paper rests on the value-for-money principle, analyzing contract options based on costs for the management and benefit to the unions. We use this principle in order to design a comprehensible, and thereby applicable negotiation support system. The approach helps to identify concession exchanges across contract options that result either in small cost increases for management and large benefit gains to the union, or large cost savings and few benefit losses. We apply the system to a case study to show that pareto-improvements can serve to increase the settlement probability and the quality of the final contract. The system is designed for negotiations nearing deadlock.