Final-offer arbitration is analyzed when parties are permitted to renegotiate after bids are submitted to the arbiter. If the failure to settle without arbitration arises owing to informational asymmetries, then the final-offer bids may communicate some of this private information. The...

We conduct an experimental analysis of final offer arbitration (FOA) with differentially informed players. Under FOA, the arbitrator must choose one of the two submitted offers. In our control, the uninformed player makes an offer to the informed player prior to the submission of offers to the...