[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/pri/indrel/146.html
   My bibliography  Save this paper

Models of Arbitrator Behavior: Theory and Evidence

Author

Listed:
  • Orley Ashenfelter

    (Princeton University)

  • David Bloom

    (Carnegie Mellon University)

Abstract
Our purpose in this paper is to open up the empirical analysis of some simple models of arbitrator behavior under alternative mechanisms and in different economic environments. We do this by studying the outcomes of the first two years of operation of a New Jersey statute that mandates the arbitration of unsettled pay disputes by New Jersey police officers and the municipalities that employ them. This remarkable statute provides for conventional arbitration of pay disputes if the two parties can agree to this, but requires the use of final-offer arbitration if they cannot. Con- sequently, the results of both mechanisms may be analyzed and compared. Although further evidence from the New Jersey experience with an arbitration statute is necessary before firm conclusions should be drawn, several preliminary results of the empirical analysis are worth empha- sizing. First, the New Jersey system does seem to confront the parties with considerable uncertainty about the arbitration decisions they can expect. The mean of arbitrator's preferred awards is apparently closely related to alternative local wage settlements, but these decisions still contain considerable variability around this mean. Second, the union final offers have thus far been very conservative relative to the distribution of arbitrator's preferred settlements. This is demonstrated both by (a) the low values of union and employer final offers relative to the mean of con- ventionally arbitrated settlements, and by (b) the high correlation between the incidence of employer victories and the mean of union and employer final offers. The result is that a high proportion of union offers are being accepted by arbitrators and this proportion is predictable from the data on conventionally arbitrated outcomes alone. Whether this state of affairs simply reflects the risk aversion of the parties or a mistaken view by the parties of what arbitrators will allow is an important subject for further research. If the latter is the case the central tendency of future arbi- trated settlements may be considerably greater than has heretofore been seen, but employer victories are also likely to become considerably more numerous. In either case, our empirical results suggest that the form of the arbitration system adopted may have a considerable impact on the size of arbitration awards.

Suggested Citation

  • Orley Ashenfelter & David Bloom, 1981. "Models of Arbitrator Behavior: Theory and Evidence," Working Papers 526, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:146
    as

    Download full text from publisher

    File URL: https://dataspace.princeton.edu/bitstream/88435/dsp01hd76s0061/1/146.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:fth:prinin:163 is not listed on IDEAS
    2. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-159, February.
    3. William M. Landes & Richard A. Posner, 1978. "Adjudication as a Private Good," NBER Working Papers 0263, National Bureau of Economic Research, Inc.
    4. repec:fth:prinin:172 is not listed on IDEAS
    5. 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..
    6. David Card, 1983. "Arbitrators as Lie Detectors," Working Papers 552, Princeton University, Department of Economics, Industrial Relations Section..
    7. David E. Card, 1983. "Arbitrators as Lie Detectors," Working Papers 172, Princeton University, Department of Economics, Industrial Relations Section..
    8. 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..
    9. Henry S. Farber, 1981. "Splitting-the-Difference in Interest Arbitration," ILR Review, Cornell University, ILR School, vol. 35(1), pages 70-77, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juan Pablo Montero, 2004. "A model of arbitration in regulation," Econometric Society 2004 Latin American Meetings 219, Econometric Society.
    2. Freeman, Richard B, 1986. "Unionism Comes to the Public Sector," Journal of Economic Literature, American Economic Association, vol. 24(1), pages 41-86, March.
    3. Carmen Herrero & Juan Moreno-Ternero & Giovanni Ponti, 2010. "On the adjudication of conflicting claims: an experimental study," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(1), pages 145-179, January.
    4. Ashenfelter, Orley, et al, 1992. "An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems," Econometrica, Econometric Society, vol. 60(6), pages 1407-1433, November.
    5. Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260, Elsevier.
    6. Orley Ashenfelter & Gordon B. Dahl, 2003. "Strategic Bargaining Behavior, Self-Serving Biases, and the Role of Expert Agents An Empirical Study of Final-Offer Arbitration," Working Papers 857, Princeton University, Department of Economics, Industrial Relations Section..
    7. Alexandre Mas, 2006. "Pay, Reference Points, and Police Performance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 783-821.
    8. Max H. Bazerman & Henry S. Farber, 1983. "Arbitrator Decision Making: When Are Final Offers Important?," NBER Working Papers 1183, National Bureau of Economic Research, Inc.
    9. Orley Ashenfelter & David E. Bloom & Gordon B. Dahl, 2013. "Lawyers as Agents of the Devil in a Prisoner's Dilemma Game," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 10(3), pages 399-423, September.
    10. David Dickinson, 2003. "Mediation, Walrasian Tâtonnement, and Negotiations as an Exchange Economy," Working Papers 2003-11, Utah State University, Department of Economics.
    11. Henry S. Farber & Max H. Bazerman, 1984. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," NBER Working Papers 1488, National Bureau of Economic Research, Inc.
    12. María Mercedes Adamuz & Clara Ponsatí, 2009. "Arbitration systems and negotiations," Review of Economic Design, Springer;Society for Economic Design, vol. 13(3), pages 279-303, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    2. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
    3. Freeman, Richard B, 1986. "Unionism Comes to the Public Sector," Journal of Economic Literature, American Economic Association, vol. 24(1), pages 41-86, March.
    4. Klement, Alon & Neeman, Zvika, 2012. "Does Information about Arbitrators’Win/Loss Ratios Improve Their Accuracy?," Foerder Institute for Economic Research Working Papers 275786, Tel-Aviv University > Foerder Institute for Economic Research.
    5. Bloom, David E & Cavanagh, Christopher L, 1986. "An Analysis of the Selection of Arbitrators," American Economic Review, American Economic Association, vol. 76(3), pages 408-422, June.
    6. Marselli, Riccardo & McCannon, Bryan C. & Vannini, Marco, 2015. "Bargaining in the shadow of arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 356-368.
    7. Nathalie Chappe, 2001. "L'analyse économique d'un mode de résolution des litiges : l'arbitrage," Revue Française d'Économie, Programme National Persée, vol. 15(4), pages 187-208.
    8. Daniel R. Marburger & Paul L. Burgess, 2004. "Can Prior Offers and Arbitration Outcomes Be Used to Predict the Winners of Subsequent Final‐Offer Arbitration Cases?," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 93-102, July.
    9. Klement, Alon & Neeman, Zvika, 2011. "Private Selection and Arbitration Neutrality," Working Paper Series 4074, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    10. Alon Klement & Zvika Neeman, 2013. "Does Information about Arbitrators' Win/Loss Ratios Improve Their Accuracy?," The Journal of Legal Studies, University of Chicago Press, vol. 42(2), pages 369-397.
    11. repec:vuw:vuwscr:19179 is not listed on IDEAS
    12. Klement, Alon & Neeman, Zvika, 2011. "Private Selection and Arbitration Neutrality," Working Paper Series 19179, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    13. Henry S. Farber & Max H. Bazerman, 1984. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," NBER Working Papers 1488, National Bureau of Economic Research, Inc.
    14. Roussey, Ludivine & Soubeyran, Raphael, 2018. "Overburdened judges," International Review of Law and Economics, Elsevier, vol. 55(C), pages 21-32.
    15. Adam Smith & David Skarbek & Bart Wilson, 2012. "Anarchy, groups, and conflict: an experiment on the emergence of protective associations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 325-353, February.
    16. Jahn, Elke J. & Wagner, Thomas, 2001. "Labour's law?," Discussion Papers 6, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    17. David Dickinson, 2003. "Mediation, Walrasian Tâtonnement, and Negotiations as an Exchange Economy," Working Papers 2003-11, Utah State University, Department of Economics.
    18. Brian R. Powers, 2019. "An analysis of dual-issue final-offer arbitration," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 81-108, March.
    19. 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.
    20. Hanato, Shunsuke, 2019. "Simultaneous-offers bargaining with a mediator," Games and Economic Behavior, Elsevier, vol. 117(C), pages 361-379.
    21. Bruce Benson, 1999. "To Arbitrate or To Litigate: That Is the Question," European Journal of Law and Economics, Springer, vol. 8(2), pages 91-151, September.
    22. James Andreoni & Ray D Madoff, 2007. "Overconfdence and Judicial Discretion: Do Winner-take-all Rules Discourage Pre-trial Agreement?," Levine's Bibliography 843644000000000198, UCLA Department of Economics.

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pri:indrel:146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bobray Bordelon (email available below). General contact details of provider: https://edirc.repec.org/data/irprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.