An amendment to final-offer arbitration

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)

Abstract

Final-offer arbitration (FOA) was proposed to settle a dispute between two disputants. Although FOA was proposed to induce two disputants to reach an agreements by themselves, FOA fails to achieve the fulfillment, when disputants have incomplete information about the arbitrator's notion of a fair settlement. This paper proposes a new arbitration procedure, which is a simple amendment to FOA that lets the arbitration settlement be determined by the loser's offer if the offers diverge. We show that the offers converge in a unique pure strategy Nash equilibrium without any additional condition. We also provide two methods to prevent an extreme arbitration result, in case the offers do not converge for some reasons.

Original languageEnglish
Pages (from-to)9-19
Number of pages11
JournalMathematical social sciences
Volume46
Issue number1
DOIs
Publication statusPublished - 2003 Aug 1
Externally publishedYes

Keywords

  • Amended FOA (AFOA)
  • Arbitration
  • Dispute
  • Final-offer arbitration (FOA)

ASJC Scopus subject areas

  • Sociology and Political Science
  • Social Sciences(all)
  • Psychology(all)
  • Statistics, Probability and Uncertainty

Fingerprint Dive into the research topics of 'An amendment to final-offer arbitration'. Together they form a unique fingerprint.

Cite this