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Learning from Interest Arbitration: The Next round

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  • Craig A. Olson
  • Barbara L. Rau

Abstract

In final offer arbitration the decision of the arbitrator provides the parties with information about the preferences of the arbitrator that is not available prior to the award. Using data from Wisconsin teacher negotiations from 1977 to 1986, the authors find that the information contained in an award altered the parties' expectations about the arbitrator's preferences and influenced the subsequent negotiated settlement. The negotiated settlement following an award was higher when the union's final offer was selected than when the employer's offer was selected. In the round following an award, the variance in negotiated settlements declined, and the wage structure toward which the settlements converged was one that conformed with the arbitrator's views of fairness.

Suggested Citation

  • Craig A. Olson & Barbara L. Rau, 1997. "Learning from Interest Arbitration: The Next round," ILR Review, Cornell University, ILR School, vol. 50(2), pages 237-251, January.
    • Handle: RePEc:sae:ilrrev:v:50:y:1997:i:2:p:237-251
    DOI: 10.1177/001979399705000203
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    References listed on IDEAS

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    1. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. Craig A. Olson & Paul Jarley, 1991. "Arbitrator Decisions in Wisconsin Teacher Wage Disputes," ILR Review, Cornell University, ILR School, vol. 44(3), pages 536-547, April.
    3. Henry S. Farber & Harry C. Katz, 1979. "Interest Arbitration, Outcomes, and the Incentive to Bargain," ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
    4. John Thomas Delaney, 1983. "Strikes, Arbitration, and Teacher Salaries: A Behavioral Analysis," ILR Review, Cornell University, ILR School, vol. 36(3), pages 431-446, April.
    5. Gibbons, Robert, 1988. "Learning in Equilibrium Models of Arbitration," American Economic Review, American Economic Association, vol. 78(5), pages 896-912, December.
    6. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-159, February.
    7. 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.
    8. Max H. Bazerman, 1985. "Norms of Distributive Justice in Interest Arbitration," ILR Review, Cornell University, ILR School, vol. 38(4), pages 558-570, July.
    9. Peter Feuille & John Thomas Delaney, 1986. "Collective Bargaining, Interest Arbitration, and Police Salaries," ILR Review, Cornell University, ILR School, vol. 39(2), pages 228-240, January.
    10. Janet Currie, 1989. "Who Uses Interest Arbitration? The Case of British Columbia's Teachers, 1947–1981," ILR Review, Cornell University, ILR School, vol. 42(3), pages 363-379, April.
    11. 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.
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    Cited by:

    1. Daniel R. Marburger & Paul L. Burgess, 2004. "Can Prior Offers and Arbitration Outcomes Be Used to Predict the Winners of Subsequent Final‐Offer Arbitration Cases?," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 93-102, July.

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