Splitting-the-Difference in Interest Arbitration

Bibliographic Data

ID3395252
AuthorsHenry S Farber (corresponding author)
Year1981
Volume35
Issue1
Pages70-77
Publication date1981-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueIndustrial and Labor Relations Review (JOURNAL)
Journal identifiersISSN: 0019-7939 • E-ISSN: 2162-271X
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/001979398103500106
OpenAlexW1992549053
LanguageEN
Citations received17

This study develops two models of the behavior of interest arbitrators in which the arbitrator has some exogenous notion of an equitable settlement and yet is also influenced to some extent by the positions of the parties. The author argues that it is the arbitrator's notion of an equitable outcome that determines the positions of the parties, and empirical evidence suggesting that the arbitrator merely splits the difference is misleading. In fact, the parties are likely to position themselves around the expected arbitration award, suggesting that the expected arbitration outcome shapes the parties' bargaining positions rather than the reverse. There is nevertheless some truth to the notion that an arbitrator who is sensitive to the demands of the parties can chill bargaining. The author therefore proposes that the arbitration award be made independent of actual negotiating positions through a closed-offer mechanism

Arbitration · Business · Economics · Epistemology · Law and economics · Mechanism (biology) · Microeconomics · Negotiation · Outcome (game theory) · Political science · Position (finance) · Settlement (finance) · Corporate Finance and Governance · Corporate Governance and Law · International Arbitration and Investment Law · Law · Law, Economics, and Judicial Systems · Merger and Competition Analysis · Philosophy

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