Arbitrator and Negotiator Behavior Under an Appellate System

Posted: 7 Jan 2010

See all articles by Orley Ashenfelter

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

James P. Dow

California State University, Northridge - Department of Economics

Dean Hyslop

Motu Economic and Public Policy Research

Date Written: August 1, 1997

Abstract

In this paper we report the results of an empirical study of a unique arbitration system used in the State of Iowa for resolving disputes between public sector employees and their employers. Under the Iowa tri-offer arbitration system the parties first present their cases to a neutral fact finder who issues a written recommendation. If the fact finder’s proposal does not induce the parties to settle their dispute, either party may request binding arbitration by a second neutral. The arbitrator must select, without compromise, one of the parties "final-offers" or the earlier fact finder’s proposal. This multi-stage system is analogous to an appellate court and provides a unique opportunity to test whether the parties to a dispute face genuine arbitral uncertainty: the extent to which the arbitrator does not concur with the fact finder is an obvious measure of arbitral uncertainty. We first provide a simple econometric framework to measure the uncertainty that the parties should expect to face if they are unable to resolve their dispute. The results support the notion that the neutrals have the same distributions of preferences, however we reject the simple model of arbitrated outcomes. Our second objective is to evaluate the actual strategies the parties adopt in determining their offers. The results also suggest that a simple model of optimal offers by risk neutral negotiators fits the data quite well, although we reject the strict form of this model.

Keywords: Arbitration system, Iowa, Public sector, Employees, Employers, Dispute resolution, Empirical study

JEL Classification: C01, C23, J52

Suggested Citation

Ashenfelter, Orley C. and Dow, James P. and Hyslop, Dean R., Arbitrator and Negotiator Behavior Under an Appellate System (August 1, 1997). Available at SSRN: https://ssrn.com/abstract=1532469

Orley C. Ashenfelter

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4040 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

James P. Dow

California State University, Northridge - Department of Economics ( email )

Northridge, CA 91330
United States
(818) 677-4539 (Phone)
(818) 677-4903 (Fax)

Dean R. Hyslop (Contact Author)

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
313
PlumX Metrics