Avoiding the Problems of Anchoring in Unique Baseball Arbitration

February 28, 2011

Baseball arbitration has a unique spin-on how arbitrators “hand down” decisions regarding the salary of certain veteran players. Both sides submit a “final offer,” and the arbitrator separately determines the appropriate salary. Whichever side submits a final offer closer to the arbitrator’s final decision trumps. One party wins—the arbitrator does not split the baby.

The parties are encouraged to think carefully and reasonably about an appropriate final offer because the party that is more reasonable is ultimately rewarded. In this way, parties are discouraged from using outrageous numbers in an effort to anchor the arbitrator’s decision. What a unique way to avoid the anchoring effect!

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