Divergent Expectations as a Cause of Disagreement in Bargaining: Evidence from a Comparison of Arbitration Schemes
The fact that settlement rates are much higher where final-offer arbitration, rather than conventional arbitration, is the dispute settlement procedure is used as the basis of a test of the role of divergent and relatively optimistic expectations in causing disagreement in negotiations. Calculations of identical-expectations contract zones, using existing estimates of models of arbitrator behavior, yield larger identical-expectations contract zones in conventional arbitration than in final-offer arbitration. This evidence clearly suggests that divergent expectations alone are not an adequate explanation of disagreement in labor-management negotiations. A number of alternative explanations for disagreement are suggested and evaluated. Copyright 1989, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Volume (Year): 104 (1989)
Issue (Month): 1 (February)
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