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Arbitration is increasingly employed to resolve disputes. Two arbitration mechanisms, conventional arbitration (CA) and final-offer arbitration (FOA) are commonly utilized, but previous theoretical and empirical research has found that they are unsatisfactory. Several alternative mechanisms have been proposed, but ultimately laboratory research has found that they do not offer an improvement. An exception...
Final-offer arbitration (FOA) was proposed to settle a dispute between two disputants. Although FOA was proposed to induce two disputants to reach an agreements by themselves, FOA fails to achieve the fulfillment, when disputants have incomplete information about the arbitrator's notion of a fair settlement. This paper proposes a new arbitration procedure, which is a simple amendment to FOA that lets...
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