A comparison of conventional, final-offer, and "combined" arbitration for dispute resolution
AbstractTwo widely used forms of arbitration are conventional arbitration, in which the arbitrator makes an unconstrained settlement choice, and final-offer arbitration, in which the arbitrator must choose between disputants' final offers. Under an innovative, as yet unused approach called 'combined arbitration,' if the arbitrator's notion of a fair settlement lies between the disputants' final offers, final-offer arbitration rules are used; otherwise, conventional arbitration rules are used. Theoretically, by combining the risks that the two standard forms of arbitration pose for disputants who do not voluntarily settle, combined arbitration should generate convergent final offers. The results of this controlled laboratory study show, however, that dispute rates are highest in combined arbitration and lowest in conventional arbitration. These results challenge the theoretical predictions for combined arbitration as well as claims that final-offer arbitration should reduce disputes compared to conventional arbitration. The results are, however, consistent with a simple theory of disputant optimism. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 57 (2004)
Issue (Month): 2 (January)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
Other versions of this item:
- David Dickinson, . "A comparison of conventional, final offer, and combined arbitration for dispute resolution," Working Papers 2001-04, Utah State University, Department of Economics.
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
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