In recent years, final-offer arbitration (FOA) has become an increasingly frequent means of resolving labor disputes in the private and public sectors. The present paper models FOA when each disputant has private information bearing on the true value of the case. The model characterizes the...

In final-offer arbitration the two parties to a dispute submit final offers to an arbitrator. The arbitrator then chooses as the binding solution that offer which is closest to his own view of the appropriate outcome. Because the disputants are imperfectly informed about the arbitrator's...

A new procedure is proposed for settling disputes which combines binding arbitration (BA) and final-offer arbitration (FOA). Unlike either of the two pure procedures, combined arbitration (CA) induces the two parties to converge in making their final offers. Under BA, the arbitrator's settlement...