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An analysis of dual-issue final-offer arbitration

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  • Brian R. Powers

    (Arizona State University)

Abstract

We consider a final-offer arbitration problem between two players with two quantitative issues in dispute. Under reasonable assumptions we model the problem as a zero-sum two person game and show that a pair of pure strategies explicitly constructed are the unique minimax strategies for the two players.

Suggested Citation

  • Brian R. Powers, 2019. "An analysis of dual-issue final-offer arbitration," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 81-108, March.
    • Handle: RePEc:spr:jogath:v:48:y:2019:i:1:d:10.1007_s00182-018-0653-7
    DOI: 10.1007/s00182-018-0653-7
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    References listed on IDEAS

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    1. Craig A. Olson, 1992. "Arbitrator Decision-Making in Multi-Issue Disputes," Working Papers 676, Princeton University, Department of Economics, Industrial Relations Section..
    2. Eran Hanany & D. Marc Kilgour & Yigal Gerchak, 2007. "Final-Offer Arbitration and Risk Aversion in Bargaining," Management Science, INFORMS, vol. 53(11), pages 1785-1792, November.
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    4. Steven J. Brams & Samuel Merrill, III, 1983. "Equilibrium Strategies for Final-Offer Arbitration: There is no Median Convergence," Management Science, INFORMS, vol. 29(8), pages 927-941, August.
    5. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-159, February.
    6. Mazalov, Vladimir & Tokareva, Julia, 2012. "Arbitration procedures with multiple arbitrators," European Journal of Operational Research, Elsevier, vol. 217(1), pages 198-203.
    7. Donald Wittman, 1986. "Final-Offer Arbitration," Management Science, INFORMS, vol. 32(12), pages 1551-1561, December.
    8. Dickinson, David L., 2006. "The chilling effect of optimism: The case of final-offer arbitration," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(1), pages 17-30, February.
    9. Craig A. Olson, 1992. "Arbitrator Decision-Making in Multi-Issue Disputes," Working Papers 676, Princeton University, Department of Economics, Industrial Relations Section..
    10. Henry S. Farber, 1980. "An Analysis of Final-Offer Arbitration," Journal of Conflict Resolution, Peace Science Society (International), vol. 24(4), pages 683-705, December.
    11. William F. Samuelson, 1991. "Final-Offer Arbitration Under Incomplete Information," Management Science, INFORMS, vol. 37(10), pages 1234-1247, October.
    12. Armstrong, Michael J. & Hurley, W. J., 2002. "Arbitration using the closest offer principle of arbitrator behavior," Mathematical Social Sciences, Elsevier, vol. 43(1), pages 19-26, January.
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