Is Arbitration Addictive? Evidence From the Laboratory and the Field


We test for the presence of an addictive effect of arbitration
(positive state dependence) using data both from a laboratory bargaining
experiment and from the field. We find no evidence of state dependence in
the experimental data, and we find weak evidence of positive state dependence
in the field data on teachers in British Columbia. Hence, we reject the view
that use of arbitration per se leads to state dependence either through
reducing uncertainty about the arbitral process or through changing the
bargaining parties perceptions about their opponents. The results further
suggest that an explanation for any positive state dependence we find in the
British Columbia field data must lie in an aspect of the arbitration process
which is not captured by our simple experimental design.

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Proceeding of the Forty-Fourth Annual Meeting of the Industrial Relations Research Association, 1992
Working Papers