Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/23802 
Year of Publication: 
2005
Series/Report no.: 
Discussion Paper No. 230
Publisher: 
European University Viadrina, Department of Business Administration and Economics, Frankfurt (Oder)
Abstract: 
A series of experiments compares bargaining behavior under three different settings: no arbitration, conventional and final offer arbitration. Under no arbitration disputes with zero payoffs were around 10%, while the pie was equally split in less than half of the cases. Under conventional arbitration - where the arbitrator is free in choosing his award - every third negotiation ended in dispute giving evidence for a modified chilling effect. Under final offer arbitration - where the arbitrator has to award to the bargainers either one of their final offers - there was only a small increase of disputes while equal splits have doubled to 80%. The experiment shows final offer arbitration, though having lower dispute rates, to interfer more with bargaining behavior than conventional arbitration where the bargaining behavior was similar to the no-arbitration treatment. Under final offer arbitration, negotiators adjust their bargaining strategy to the arbitrator's expected award.
Subjects: 
Bargaining
Arbitration
Experiments
Fair Awards
JEL: 
C91
D63
C78
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.