Arbitration Disputants Should Share Bids before Decisions on How Much to Invest in Case, Study Says

Tuesday, September 23, 2008 - 14:14 in Psychology & Sociology

(PhysOrg.com) -- In the first academic study to examine bidding and investment strategies in final-offer arbitration, economists at the University of Arkansas found that it is socially optimal for parties in conflict to make bids publicly observable before deciding how much time, effort and money to invest in building a case. The results provide insight into how final-offer-arbitration procedures might be standardized to minimize inefficient investments and generate moderate bidding behavior.

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