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The effect of a larger contract zone on agreement rates under arbitration

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  • Kosmopoulou, Georgia
  • Nedelescu, Daniel M.

Abstract

In the arbitration literature there is no common agreement about the nature of the relationship between the size of the contract zone and agreement rates. The results from our experiment show that, when the size of the contract zone increases there are two prevailing effects: one effect is attributed to changes in the range of possible outcomes, and the other to coordination issues. While more room for negotiation leads to higher agreement rates, coordination problems largely impede agreement among rational subjects. The overall effect of an increase in the contract zone depends on the relative magnitude of these opposing effects.

Suggested Citation

  • Kosmopoulou, Georgia & Nedelescu, Daniel M., 2022. "The effect of a larger contract zone on agreement rates under arbitration," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    • Handle: RePEc:eee:soceco:v:100:y:2022:i:c:s2214804322000751
    DOI: 10.1016/j.socec.2022.101901
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    References listed on IDEAS

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    Cited by:

    1. Farmer, Amy & Pecorino, Paul, 2024. "Proposal convergence and settlement under final offer arbitration," International Review of Law and Economics, Elsevier, vol. 77(C).

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    More about this item

    Keywords

    Arbitration; Experiments; Coordination; Contract zone;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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