Protection for Whom? Creditor Conflict and Bankruptcy

In the absence of a bankruptcy law, private debt collectionremedies generally result in an ad hoc disposal of the debtor'sassets, which reduces the aggregate value of creditors' claims.We show that creditors will often choose not to write privatecontracts that would prevent this inefficient behavior, eventhough these contracts would be to the mutual benefit of allcreditors. Our analysis therefore provides an economic rationalefor the existence of a bankruptcy law that makes a collectiveresolution compulsory for all creditors. We argue that sucha mandate is a requisite part of any effective bankruptcy system,including proposals for market-based resolutions of insolvency.     

Fairness and participation in evaluation procedures: Effects on task attitudes and performance

A laboratory study was conducted to examine the role of two components of participatory work evaluation procedures on fairness attitudes and work performance. Opportunity for influential opinion expression and knowledge of evaluation criteria were manipulated in a business simulation exercise. Thirty-eight male and 49 female undergraduates worked under a task evaluation procedure that either did or did not allow them to express their opinions to the evaluator. In addition, subjects either were or were not provided with specific information about the criteria to be used in making the performance evaluation, and they received either a favorable or an unfavorable outcome. Questionnaire responses indicated that influential opinion expression enhanced perceptions of procedural and distributive fairness independently of the outcome of the evaluation. Both knowledge of evaluation criteria and perceptions of evaluation fairness correlated with subsequent task performance. The implications of these findings are discussed with respect to understanding the influence of procedural justice on attitudes and task behavior in organizational settings.