Optimal Arbitration

Tymofiy Mylovanov; Andriy Zapechelnyuk

doi:10.1111/iere.12016

Optimal Arbitration

Tymofiy Mylovanov, Andriy Zapechelnyuk^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

We study common arbitration rules for disputes of two privately informed parties, final offer and conventional arbitration. Conventional arbitration is shown to be an optimal arbitration rule in environments with transferable utility, while final offer arbitration is optimal if utility is nontransferable and the parties' interests are not too aligned. These results explain the prevalence of both arbitration rules in practice.

Original language	English
Pages (from-to)	769-785
Number of pages	17
Journal	International Economic Review
Volume	54
Issue number	3
DOIs	https://doi.org/10.1111/iere.12016
Publication status	Published - Aug 2013

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10.1111/iere.12016

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abstract = "We study common arbitration rules for disputes of two privately informed parties, final offer and conventional arbitration. Conventional arbitration is shown to be an optimal arbitration rule in environments with transferable utility, while final offer arbitration is optimal if utility is nontransferable and the parties' interests are not too aligned. These results explain the prevalence of both arbitration rules in practice.",

author = "Tymofiy Mylovanov and Andriy Zapechelnyuk",

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AB - We study common arbitration rules for disputes of two privately informed parties, final offer and conventional arbitration. Conventional arbitration is shown to be an optimal arbitration rule in environments with transferable utility, while final offer arbitration is optimal if utility is nontransferable and the parties' interests are not too aligned. These results explain the prevalence of both arbitration rules in practice.

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Optimal Arbitration

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