Working Paper: NBER ID: w1149
Authors: Orley Ashenfelter; David E. Bloom
Abstract: This paper analyzes and compares arbitrator behavior under conventional and final-offer arbitration. Simple models of arbitrator behavior are developed under each of these alternative mechanisms. These models are estimated and tested using data on the outcomes of both forms of arbitrationin New Jersey, a state in which arbitration is mandatory for unresolved pay disputes involving police officer unions and public employers. The major findings are (1) that the high proportion of union victories under final-offer arbitration were generated by a set of impartial arbitrators applying the same standards used in conventional arbitration, and (2) that union bargainers appear to be considerably more risk averse than employer bargainers, with the wage increases under final-offer arbitration having a lower mean and a lower variance than under conventional arbitration.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| arbitration mechanism (J52) | outcomes (P47) |
| impartial arbitrators (J52) | union victories under final-offer arbitration (J52) |
| risk preferences of bargainers (C79) | wage increases under final-offer arbitration (J52) |
| final-offer arbitration (J52) | lower mean and variance in wage increases (J31) |