Question

One criticism of conventional interest arbitration is that:

a. It may cause a "narcotic effect," making the two parties more likely to turn to arbitration to settle other disputes in the future.
b. It reduces the cost of not reaching agreement, thereby causing a "chilling effect" on the parties' incentive to reach an agreement.
c. It affords the arbitrator the least degree of flexibility to determine an appropriate settlement outcome, opening the door to arbitration.
d. It affords the arbitrator the greatest degree of flexibility to determine an appropriate settlement outcome.
e. Anticipating arbitration in the event of an impasse may change the psychology of how bargaining teams bargain.

Answer 1

One criticism of conventional interest arbitration is that it reduces the parties' incentive to reach an agreement due to the ease of turning to arbitration.

Step-by-step explanation:

One criticism of conventional interest arbitration is that it reduces the cost of not reaching agreement, thereby causing a "chilling effect" on the parties' incentive to reach an agreement. This means that if parties know they can turn to arbitration to settle disputes, they may be less motivated to negotiate and come to a resolution on their own. The ease of arbitration can create a situation where the parties rely on arbitration as the default solution rather than actively working towards an agreement.

For example, imagine a company and a labor union negotiating a contract. If they know that arbitration is readily available and will ultimately determine the outcome if they cannot come to an agreement, they may not put as much effort into finding a mutually beneficial solution. This can lead to prolonged disputes and a reliance on arbitration rather than effective negotiation.