Discovery in a screening model of final offer arbitration

Amy Farmer and Paul Pecorino ()

International Review of Law and Economics, 2022, vol. 69, issue C

Abstract: We develop screening models of final offer arbitration (FOA) in which the uninformed party makes a demand to the informed party. We consider models in which settlement occurs before and after the submission of binding offers, and in each we analyze costly discovery. Our results are compared to conventional arbitration (CA) which may be viewed as a litigation model. Overall, the incentive to invoke discovery is stronger in FOA than in CA, due in part, to informational rents often present in FOA, but not in CA. Moreover, submitted proposals under FOA contain information which raise the benefit of invoking discovery. FOA is a widely used procedure, including in the telecommunications industry.

Keywords: Final offer arbitration; Discovery; Asymmetric information; Screening; Arbitration (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0144818821000673
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:69:y:2022:i:c:s0144818821000673

DOI: 10.1016/j.irle.2021.106043

Access Statistics for this article

International Review of Law and Economics is currently edited by C. Ott, A. W. Katz and H-B. Schäfer

More articles in International Review of Law and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().