Expectations and Comparative Arbitration Institutions
AbstractArbitration is a growing method of resolving disputes in varied settings. While two specific arbitration rules dominate in practice, other procedures have been hypothesized to better promote voluntary settlement. Such hypotheses require theoretical assumptions of identical bargainer expectations even though divergent expectations or optimism is considered prevalent in naturally occurring negotiations. This article examines disputant behavior in a controlled laboratory setting where point-estimates of disputant expectations are captured, thus allowing one to test the âchilling effectâ hypotheses of optimism on both dispute rates and final- offer divergence. The extent of the dual chilling effect is examined for both commonly used arbitration procedures as well as for an innovative procedure that, while not used in practice, is theoretically predicted to induce final-offer convergence when expectations are unbiased. The results show that optimism is prevalent in the data, extra information does not fully de-bias the disputants, and optimism increases both dispute rates and final- offer divergence. The degree to which a final offer plays a strategic role in the arbitration institution is an important determinant of this final chilling effect result. Lastly, once the effects of optimism are considered, the innovative arbitration procedure actually generates the highest dispute rates, contrary to its theoretical claim.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Department of Economics, Appalachian State University in its series Working Papers with number 04-22.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: Thelma C. Raley Hall, Boone, North Carolina 28608
Web page: http://www.business.appstate.edu/departments/economics/
More information through EDIRC
Other versions of this item:
- David Dickinson, 2003. "Expectations and Comparative Arbitration Institutions," Working Papers 2003-02, Utah State University, Department of Economics.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- David Dickinson, 2004.
"Bargaining Outcomes with Double-Offer Arbitration,"
04-19, Department of Economics, Appalachian State University.
- David Dickinson & Lynn Hunnicutt, 2010. "Nonbinding recommendations: the relative effects of focal points versus uncertainty reduction on bargaining outcomes," Theory and Decision, Springer, vol. 69(4), pages 615-634, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (O. Ashton Morgan).
If references are entirely missing, you can add them using this form.