Title: An Analysis of Multi-Issue Final-Offer Arbitration
Speaker: Brian Powers, University of Illinois at Chicago
Time: 2:00 pm, Monday February 1
Venue: Classroom LC 301
Abstract: First proposed in 1966, final-offer arbitration is designed to address some of the drawbacks of conventional arbitration. After failing to reach agreement during negotiations, under final-offer arbitration, the arbitrator must select one of the two final-offers of the parties and cannot craft a compromise. The case of a single issue has been studied considered in the literature, while little attention has been given to the study of the game's dynamics when more than one issue is in dispute. In order to broaden the analysis of this game, we consider a final-offer arbitration problem between two players with two quantitative issues in dispute. Under reasonable assumptions we model the problem as a zero-sum two person game and show that a pair of pure strategies explicitly constructed are the unique optimal strategies for the two players.