IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v231y2025ics0167268125000228.html
   My bibliography  Save this article

The contractual dispute resolution game: Real-effort experiments on contract negotiation and arbitration

Author

Listed:
  • Corgnet, Brice
  • Gächter, Simon
  • Hernán-González, Roberto

Abstract

In many contractual arrangements where product or service delivery occurs sometime after contracts have been concluded, conditions may change, leading to disputes that need to be resolved often by a third party (arbitrator/mediator). In this paper we introduce the Contractual Dispute Resolution Game (CDRG), which allows us to study dispute resolution through arbitration. Unlike prior research studying arbitration at impasse using zero-sum bargaining games, we analyze a situation where parties can create additional value. We introduce a novel real-effort task, the Car Assembly Real-effort Task (CART), and show in two studies how automated arbitration rules (Study 1) and human arbitrators (Study 2) affect dispute resolution and surplus creation. In Study 1, we find that high-accuracy arbitration enhances efficiency. In Study 2, we find that arbitrators who are incentivized based on the total surplus of the negotiation do also promote greater efficiency. The CDRG provides a valuable tool for examining the effects of arbitration and mediation in settings where contracts are incomplete and can be impacted by shocks.

Suggested Citation

  • Corgnet, Brice & Gächter, Simon & Hernán-González, Roberto, 2025. "The contractual dispute resolution game: Real-effort experiments on contract negotiation and arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 231(C).
  • Handle: RePEc:eee:jeborg:v:231:y:2025:i:c:s0167268125000228
    DOI: 10.1016/j.jebo.2025.106902
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268125000228
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jebo.2025.106902?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Contractual disputes; Cooperation; Arbitration; Fairness; Risk-sharing; Laboratory experiments; Real-effort experiments; Car Assembly Real-effort Task (CART); Contractual Dispute Resolution Game (CDRG);
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:231:y:2025:i:c:s0167268125000228. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.