Arbitrator Decision Making: When are Final Offers Important?

Max H. Bazerman · Henry S. Farber

43 citations0/0 files storedIndustrial and Labor Relations Review

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Labor Movements and Unions Dispute Resolution and Class Actions Conflict Management and Negotiation

Abstract

Analysis of the wages awarded by 64 arbitrators in 25 simulated interest arbitration cases strongly supports a model in which arbitrators, in determining an award, are influenced both by the facts of the case and by the offers of the parties. The arbitrators clearly weighted the facts more heavily than the offers in all cases. In addition, the importance of the facts relative to the offers increased as the offers diverged, suggesting that arbitrators' decisions were influenced more by reasonable offers than by unreasonable offers. The results contradict the naive split-the-difference view of arbitrator behavior in conventional arbitration that has led to the development of final-offer arbitration.

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References

1966Is Compulsory Arbitration Compatible With Bargaining?1979Interest Arbitration, Outcomes, and the Incentive to Bargain 1985Norms of Distributive Justice in Interest Arbitration 1981Splitting-the-Difference in Interest Arbitration

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1993Fairness, markets, and ability to pay: Evidence from compensation executives 1994Are baseball players paid their marginal products?1986The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration 1986Empirical Models of Arbitrator Behavior under Conventional Arbitration 1992The Causes of Impasses in Labor Disputes 2009Public Sector Labor— Management Relations: Change or Status Quo?1990The Consistency and Predictability of Grievance Arbitration Awards 1993Do Negotiated and Arbitrated Salaries Differ under Final-Offer Arbitration?

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