IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v245y2026ics0167268126000946.html

An experimental comparison of conventional and final offer arbitration

Author

Listed:
  • Dorobiala, Zachary
  • Pecorino, Paul
  • Van Boening, Mark

Abstract

Under conventional arbitration (CA), the arbitrator imposes her preferred settlement on the bargaining parties, should a dispute occur. Under final offer arbitration (FOA), the arbitrator chooses one of two proposals submitted by the parties to the dispute. Settlement negotiations can occur before proposal submission (FOAB) or after proposal submission (FOAA). The experimental literature has found lower dispute rates in CA compared to FOAB. These experiments typically feature symmetric information while the theoretical literature emphasizes asymmetric information as a cause of disputes. We analyze arbitration in a screening model under which the recipient of the settlement offer is the informed party. We find similar dispute rates in FOAA and CA, with the point estimate of FOAA being 4 percentage points lower. This contrasts with previous results which suggest a systematic advantage for CA over FOA. By contrast, FOAB has a dispute rate which is 19 percentage points higher than FOAA.

Suggested Citation

  • Dorobiala, Zachary & Pecorino, Paul & Van Boening, Mark, 2026. "An experimental comparison of conventional and final offer arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 245(C).
    • Handle: RePEc:eee:jeborg:v:245:y:2026:i:c:s0167268126000946
    DOI: 10.1016/j.jebo.2026.107508
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268126000946
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2026.107508?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:245:y:2026:i:c:s0167268126000946. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.