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Does Fact-Finding Promote Settlement? Theory And A Test

Author

Listed:
  • David Dickinson
  • Lynn Hunnicutt

Abstract

Some labor negotiations include a break in which a non-binding recommendation is made by a fact-finder as an intermediate dispute resolution procedure. There is some uncertainty, however, as to whether this fact-finding increases or reduces the likelihood of settlement. Inasmuch as fact-finding reduces uncertainty about the outcome, it may “chill” bargaining and increase the need for additional dispute resolution procedures. On the other hand, the fact-finder’s recommendation may give the parties a focal point around which they are able to craft an agreement, thus reducing the incidence of disputes. Which of these effects dominates is a question that we consider using both a theoretical model and data from a controlled experimental bargaining environment.

Suggested Citation

  • David Dickinson & Lynn Hunnicutt, 2002. "Does Fact-Finding Promote Settlement? Theory And A Test," Working Papers 2002-06, Utah State University, Department of Economics.
    • Handle: RePEc:usu:wpaper:2002-06
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    File URL: https://repec.bus.usu.edu/RePEc/usu/pdf/ERI2002-06.pdf
    File Function: First version, 2002
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    Cited by:

    1. Deck, Cary A. & Farmer, Amy, 2009. "Strategic bidding and investments in final offer arbitration: Theory and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 361-373, May.
    2. David Dickinson & Lynn Hunnicutt, 2005. "Nonbinding Suggestions: The Relative Effects of Focal Points versus Uncertainty Reduction on Bargaining Outcomes," Working Papers 05-13, Department of Economics, Appalachian State University.
    3. Mao, Liang, 2020. "Optimal recommendation in two-player bargaining games," Mathematical Social Sciences, Elsevier, vol. 107(C), pages 41-45.
    4. David Dickinson & Lynn Hunnicutt, 2010. "Nonbinding recommendations: the relative effects of focal points versus uncertainty reduction on bargaining outcomes," Theory and Decision, Springer, vol. 69(4), pages 615-634, October.
    5. Daniel M. Nedelescu, 2019. "Alpha-Final Offer Arbitration: The Best Way to Avoid Negotiation Failure," Group Decision and Negotiation, Springer, vol. 28(6), pages 1109-1128, December.
    6. Kosmopoulou, Georgia & Nedelescu, Daniel M., 2022. "The effect of a larger contract zone on agreement rates under arbitration," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    7. Pecorino, Paul & Solomon, Michael & Van Boening, Mark, 2021. "Bargaining with voluntary transmission of private information: An experimental analysis of final offer arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 334-366.

    More about this item

    Keywords

    bargaining; experiments; dispute resolution; arbitration;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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