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Arbitrator Decision‐Making in the Transfer Market: an Empirical Analysis

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  • Alan Speight
  • Dennis Thomas

Abstract

This paper analyses data generated by the annual round of arbitrated settlements of disputed transfer fees for end‐of‐contract players in the English Football League. Using information on final‐offers of the disputant clubs and data on a variety of player and club characteristics we analyse arbitrated fees and final‐offers, and the relative importance of final‐offers and case facts in fashioning outcomes. Our analysis suggests that a large proportion of the variation in settlements can be accounted for by certain case facts rather than a mechanical compromise of final‐offers, with the latter receiving a relatively low weight. In general, our findings are consistent with the view that conventional arbitration systems generate little useful information in terms of final‐offers from the disputant parties.

Suggested Citation

  • Alan Speight & Dennis Thomas, 1997. "Arbitrator Decision‐Making in the Transfer Market: an Empirical Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(2), pages 198-215, May.
    • Handle: RePEc:bla:scotjp:v:44:y:1997:i:2:p:198-215
    DOI: 10.1111/1467-9485.00053
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    References listed on IDEAS

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    1. Ashenfelter, Orley, et al, 1992. "An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems," Econometrica, Econometric Society, vol. 60(6), pages 1407-1433, November.
    2. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(6), pages 1503-1528, November.
    3. Bloom, David E, 1986. "Empirical Models of Arbitrator Behavior under Conventional Arbitration," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 578-585, November.
    4. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(4), pages 819-844, July.
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    6. Currie, Janet, 1994. "Arbitrator Behavior and the Variances of Arbitrated and Negotiated Wage Settlements," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 29-40, January.
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    Cited by:

    1. Marselli, Riccardo & McCannon, Bryan C. & Vannini, Marco, 2015. "Bargaining in the shadow of arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 356-368.
    2. Fiona Carmichael & Dennis Thomas & Robert Ward, 2000. "Team performance: the case of English Premiership football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(1), pages 31-45.
    3. Orlov, Denis, 2015. "The effect of clubs’ bargaining power on football player’s transfer value," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 45-64.
    4. Feess, Eberhard & Frick, Bernd & Muehlheusser, Gerd, 2004. "Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer," IZA Discussion Papers 1180, Institute of Labor Economics (IZA).
    5. Craig A. Depken & Tomislav Globan, 2021. "Football transfer fee premiums and Europe's big five," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 889-908, January.
    6. Coates, Dennis & Parshakov, Petr, 2022. "The wisdom of crowds and transfer market values," European Journal of Operational Research, Elsevier, vol. 301(2), pages 523-534.
    7. Stephen Dobson & Bill Gerrard & Simon Howe, 2000. "The determination of transfer fees in English nonleague football," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1145-1152.
    8. Bonev, Petyo & Matsumoto, Shigeru, 2022. "An empirical evaluation of environmental Alternative Dispute Resolution methods," Economics Working Paper Series 2208, University of St. Gallen, School of Economics and Political Science.

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