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Models of Arbitrator Behavior: Theory and Evidence

  • Orley Ashenfelter
  • David Bloom

This paper analyzes and compares arbitrator behavior under conventional and final-offer arbitration. Simple models of arbitrator behavior are developed under each of these alternative mechanisms. These models are estimated and tested using data on the outcomes of both forms of arbitrationin New Jersey, a state in which arbitration is mandatory for unresolved pay disputes involving police officer unions and public employers. The major findings are (1) that the high proportion of union victories under final-offer arbitration were generated by a set of impartial arbitrators applying the same standards used in conventional arbitration, and (2) that union bargainers appear to be considerably more risk averse than employer bargainers, with the wage increases under final-offer arbitration having a lower mean and a lower variance than under conventional arbitration.

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Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 526.

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Date of creation: Nov 1981
Date of revision:
Handle: RePEc:pri:indrel:dsp01hd76s0061
Contact details of provider: Postal: Firestone Library, Princeton, New Jersey 08544-2098
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  1. William M. Landes & Richard A. Posner, 1978. "Adjudication as a Private Good," NBER Working Papers 0263, National Bureau of Economic Research, Inc.
  2. Orley Ashenfelter & David Bloom, 1983. "The Pitfalls in Judging Arbitrator Impartiality by Win-Loss Tallies Under Final-Offer Arbitration," Working Papers 543, Princeton University, Department of Economics, Industrial Relations Section..
  3. Henry S. Farber, 1981. "Splitting-the-difference in interest arbitration," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(1), pages 70-77, October.
  4. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-59, February.
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