A New System for Managing and Resolving Monetary Claims
Abstract: This paper describes a new commitment mechanism that is being used to manage and resolve monetary claims in the real world. The paper distinguishes the mechanism from conventional methods, such as litigation and mediation, by analyzing those methods as bargaining mechanisms and exploring some of their inherent flaws. In contrast to litigation, arbitration, mediation, negotiation, and traditional sealed-bid arrangements, the new mechanism has features that (1) negate any incentive or excuse for either party to try to use it to bluff or to posture (or to try to posture through a refusal to use it); and (2) allow it to be initiated and used unilaterally by one party without the other party’s cooperation or consent. In further contrast to conventional methods, self-interest obliges the initiating party to confidentially commit to a settlement that is reasonable and focal at the outset of the process, and self-interest obliges the other side to do so prior to a fixed deadline.
