Final-offer arbitration is modeled as a two-person, zero-sum game of imperfect information, in which the parties are assumed to know the probability distribution of the arbitrator's fair settlements and to make bids in an infinite strategy space that maximize their expected payoffs. Necessary and sufficient conditions for there to be local and global equilibria in pure strategies are derived, and necessary conditions for mixed strategies in a particular case are found.
ASJC Scopus subject areas
- Strategy and Management
- Management Science and Operations Research