A comparison of conventional, final offer, and combined arbitration for dispute resolution
AbstractThis paper presents results from a controlled laboratory study of bargaining behavior and dispute rates under three types of arbitration procedures. Two of these—conventional and final-offer arbitration—are commonly used in practice, while an innovative procedure called “Combined Arbitration” (Brams and Merrill 1986) is not currently used. Combined Arbitration combines the rules of the two most commonly used forms of binding arbitration (conventional and final-offer arbitration) in such a way as to generate convergent final offers in theory. Controlled laboratory results show, however, that disputes are most likely in Combined Arbitration and least likely in conventional arbitration. These results challenge the theoretical predictions of Combined Arbitration as well as the hypothesis that final-offer arbitration would be more likely to reduce disputes compared to conventional arbitration. The results may be consistent with the hypothesis that disputants are relatively optimistic about the arbitrator’s notion of a fair settlement. Implications of these findings are also discussed.
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Bibliographic InfoPaper provided by Utah State University, Department of Economics in its series Working Papers with number 2001-04.
Length: 32 pages
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dispute resolution; arbitration; bargaining; experiments;
Other versions of this item:
- David L. Dickinson, 2004. "A comparison of conventional, final-offer, and "combined" arbitration for dispute resolution," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(2), pages 288-301, January.
- 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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