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Learning in Final-Offer Arbitration with Multiple Offers


  • Juan-Pablo Montero

    () (Instituto de Economía. Pontificia Universidad Católica de Chile.)


Motivated by the price-setting process of water utilities in Chile, I study a final-offer arbitration game in which two parties simultaneously submits offers for each of the two or more units in which the item in dispute has been divided. The arbitrator is limited to choose one party's offer or the other for each unit. While the introduction of multiple offers allows the arbitrator to get closer to her ideal settlement it may prompt an arbitrarily large divergence between the parties' offers. The latter, however, does not affect the arbitrator's ability to learn from the offers.

Suggested Citation

  • Juan-Pablo Montero, 2004. "Learning in Final-Offer Arbitration with Multiple Offers," Documentos de Trabajo 270, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:270

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    Final-offer arbitration; price regulation; Nash equilibrium;

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General


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