Abstract
Arbitration provides a private sector alternative to the civil court system. In addition, it may serve as a substitute for the strike in labor management bargaining. This is particularly important for workers in the public sector who may not have the legal right to strike. Under conventional arbitration (CA), the arbitrator may impose whatever settlement he sees fit. Many have argued that if arbitrators in labor disputes merely split the difference between the positions of labor and management, arbitration would have a chilling effect on negotiations. That is, each party would be reluctant to make bargaining concessions, because these concessions would lead to a worse outcome at the arbitration hearing. In response to this perceived problem, Stevens (1966) argued for the use of what came to be know as final offer arbitration (FOA). Under this procedure, each party submits a final offer and the arbitrator is forced to choose one of these two offers as the final outcome of arbitration.
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© 2004 Kluwer Academic Publishers
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Pecorino, P. (2004). Arbitration and Bargaining. In: Rowley, C.K., Schneider, F. (eds) The Encyclopedia of Public Choice. Springer, Boston, MA. https://doi.org/10.1007/978-0-306-47828-4_35
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DOI: https://doi.org/10.1007/978-0-306-47828-4_35
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