Some labor negotiations include a break in which a non-binding recommendation is made by a fact-finder as an intermediate dispute resolution procedure. There is some uncertainty, however, as to whether this fact-finding increases or reduces the likelihood of settlement. Inasmuch as fact-finding reduces uncertainty about the outcome, it may “chill” bargaining and increase the need for additional dispute resolution procedures. On the other hand, the fact-finder’s recommendation may give the parties a focal point around which they are able to craft an agreement, thus reducing the incidence of disputes. Which of these effects dominates is a question that we consider using both a theoretical model and data from a controlled experimental bargaining environment.
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Paper provided by Utah State University, Department of Economics in its series Working Papers with number
2002-06.
Find related papers by JEL classification: C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
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