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Rules, Coordination and Manipulability Among Arbitrators

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  • Janet Currie

Abstract

This paper provides evidence that the variance of arbitrated wage settlements is systematically lower than the variance of wage settlements negotiated without arbitration using a panel of contracts between teachers and school boards in the Canadian province of British Columbia. This finding is interpreted as evidence that arbitrators coordinate their decisions. However, coordination on a rule leaves arbitrators as a group vulnerable to manipulation by coalitions of employers or employees that understand the rule. Because successful manipulation of arbitrators undermines the credibility of the institution, arbitrators as a group have incentives to change their rules from time to time. Evidence is presented that in BC, school boards were more successful than teachers at manipulating arbitrators, and that arbitrators responded by changing their rule.

Suggested Citation

  • Janet Currie, 1991. "Rules, Coordination and Manipulability Among Arbitrators," NBER Working Papers 3821, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3821
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    References listed on IDEAS

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    1. Ashenfelter, Orley & Currie, Janet, 1990. "Negotiator Behavior and the Occurence of Disputes," American Economic Review, American Economic Association, vol. 80(2), pages 416-420, May.
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    9. Craig A. Olson & Barbara Rau, 1991. "Negotiated Settlements and Learning From the Arbitration Experience," Working Papers 665, Princeton University, Department of Economics, Industrial Relations Section..
    10. 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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