Negotiations are often conducted under the stipulation that an impasse is to be resolved using final-offer arbitration (FOA). In fact, FOA frequently is not needed; in Major League Baseball, for instance, more than 80% of the salary negotiations that could go to arbitration instead reach a bargained...

Final-offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement. This procedure is modeled as a two-person, zero-sum game of imperfect information, in which the parties are...

Response to Rabow's note Rabow, G. Note---Response to "Equilibrium strategies for final-offer arbitration: there is no median convergence". Management Sci. 31 (3, March) 374--375.

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...