The Role of Learning in Arbitration: An Exploratory Experiment

Gary E. Bolton and Elena Katok ()

Chapter 11 in Advances in Understanding Strategic Behaviour, 2004, pp 235-257 from Palgrave Macmillan

Abstract: Abstract Having an arbitrator decide the outcome of a negotiation avoids the losses associated with a bargaining impasse. For example, in the public sector of the USA, arbitration is commonly mandated for failed labour negotiations to save the public the costs associated with, say, a police or firefighters’ strike.1 By definition, arbitration involves an outside party, the arbitrator, with the authority to impose a binding settlement on the disputing parties. (In contrast, a mediator is someone who can suggest, but not impose, a settlement.) We say that there is a ‘dispute’ when bargaining ends without a voluntary agreement. When we say ‘bargaining with arbitration’, we mean a negotiation in which arbitration is required in case of dispute. We shall focus here on repeated bargaining relationships, which is a common context for binding arbitration.

Keywords: Bargaining Game; Uncertainty Cost; Payoff Game; Arbitration Process; Little Square Dummy Variable (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1057/9780230523371_11

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