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Final-Offer Arbitration and the Naive Negotiator

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  • Angelo S. DeNisi
  • James B. Dworkin

Abstract

One criticism of final-offer arbitration has been that the theory underlying the technique is too complex to be understood by inexperienced negotiators. A laboratory experiment involving ninety undergraduate students playing the roles of labor and management negotiators was conducted to compare the effect on the bargaining process of three conditions: when the negotiators expect impasses to be resolved by final-offer arbitration and that procedure is explained orally; when the negotiators expect final-offer arbitration and that procedure is explained both orally and through a videotape presentation demonstrating the use of the procedure; and when the negotiators expect no third-party intervention in the event of an impasse. Subjects who viewed the videotape reported a better understanding of the procedure, set more reasonable initial positions, arrived at more reasonable final positions, made more frequent concessions, and came closer to agreement on unresolved issues than did subjects in either of the other two conditions. Attitudes of the subject-negotiators toward their opponents and the imposed settlement were also more positive among subjects who viewed the videotape.

Suggested Citation

  • Angelo S. DeNisi & James B. Dworkin, 1981. "Final-Offer Arbitration and the Naive Negotiator," ILR Review, Cornell University, ILR School, vol. 35(1), pages 78-87, October.
    • Handle: RePEc:sae:ilrrev:v:35:y:1981:i:1:p:78-87
    DOI: 10.1177/001979398103500107
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    Cited by:

    1. Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260, Elsevier.

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