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Is Arbitration Addictive? Evidence From the Laboratory and the Field

Author

Listed:
  • Janet Currie

    (Massachusetts Institute of Technology)

  • Henry S. Farber

    (Princeton University)

Abstract

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.

Suggested Citation

  • Janet Currie & Henry S. Farber, 1992. "Is Arbitration Addictive? Evidence From the Laboratory and the Field," Working Papers 675, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:295
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    References listed on IDEAS

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    1. Richard J. Butler & Ronald G. Ehrenberg, 1981. "Estimating the Narcotic Effect of Public Sector Impasse Procedures," ILR Review, Cornell University, ILR School, vol. 35(1), pages 3-20, October.
    2. Ashenfelter, Orley, et al, 1992. "An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems," Econometrica, Econometric Society, vol. 60(6), pages 1407-1433, November.
    3. Orley Ashenfelter & Janet Currie & Henry S. Farber & Matthew Spiegel, 1990. "An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems," Working Papers 647, Princeton University, Department of Economics, Industrial Relations Section..
    4. Currie, Janet & McConnell, Sheena, 1991. "Collective Bargaining in the Public Sector: The Effect of Legal Structure on Dispute Costs and Wages," American Economic Review, American Economic Association, vol. 81(4), pages 693-718, September.
    5. Janet Currie, 1989. "Who Uses Interest Arbitration? The Case of British Columbia's Teachers, 1947–1981," ILR Review, Cornell University, ILR School, vol. 42(3), pages 363-379, April.
    6. Henry S. Farber & Harry C. Katz, 1979. "Interest Arbitration, Outcomes, and the Incentive to Bargain," ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
    7. Thomas A. Kochan & Jean Baderschneider, 1978. "Dependence on Impasse Procedures: Police and Firefighters in New York State," ILR Review, Cornell University, ILR School, vol. 31(4), pages 431-449, July.
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    Cited by:

    1. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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