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Is Arbitration Addictive? Evidence From the Laboratory and the Field

  • Janet Currie
  • Henry S. Farber

We test for the presence of an addictive effect of arbitration (positive state dependence) using data both from a laboratory bargaining experiment and from the field. We find no evidence of state dependence in the experimental data, and we find weak evidence of positive state dependence in the field data on teachers in British Columbia. Hence, we reject the view that use of arbitration per se leads to state dependence either through reducing uncertainty about the arbitral process or through changing the bargaining parties' perceptions about their opponents. The results further suggest that an explanation for any positive state dependence we find in the British Columbia field data must lie in an aspect of the arbitration process which is not captured by our simple experimental design.

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File URL: http://www.nber.org/papers/w3952.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3952.

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Date of creation: Jan 1992
Date of revision:
Publication status: published as Industrial Relations Research Association Papers and Proceedins, Jan. 1993
Handle: RePEc:nbr:nberwo:3952
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  1. Janet Currie, 1989. "Who uses interest arbitration? The case of British Columbia's teachers, 1947û1981," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(3), pages 363-379, April.
  2. Richard J. Butler & Ronald G. Ehrenberg, 1981. "Estimating the narcotic effect of public sector impasse procedures," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(1), pages 3-20, October.
  3. Thomas A. Kochan & Jean Baderschneider, 1978. "Dependence on impasse procedures: Police and firefighters in New York State," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 31(4), pages 431-449, July.
  4. Thomas A. Kochan & Jean Baderschneider, 1978. "Dependence on Impasse Procedures: Police and Firefighters in New York State," ILR Review, Cornell University, ILR School, vol. 31(4), pages 431-449, July.
  5. Henry S. Farber & Harry C. Katz, 1979. "Interest arbitration, outcomes, and the incentive to bargain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
  6. 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.
  7. Currie, Janet & McConnell, Sheena, 1991. "Collective Bargaining in the Public Sector: The Effect of Legal Structure on Dispute Costs and Wages," American Economic Review, American Economic Association, vol. 81(4), pages 693-718, September.
  8. 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.
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