Individual and Corporate Dispute Resolution: Using Procedural Fairness as a Decision Heuristic

Abstract

The research reported in this paper was supported by the National Science Foundation (grants 84-11142 and 85-18597), the American Bar Foundation, and the Institute for Civil Justice of the RAND Corporation. The authors are grateful to Barbara Meierhoefer, Pat Lombard, and the Federal Judicial Center for supplying the Study 2 data, to Ruth Kanfer and Chris Earley for permission to reanalyze data from their study with the first author, and to Tom Tyler, Robert Sutton, Gina Ke, Bob Bies, and Karen Cook for their comments on earlier versions of this manuscript. Two studies examined how litigants' evaluations of the outcome and process of lawsuits affected their judgments about the of procedures and their acceptance of awards from court-ordered arbitration. The studies tested predictions concerning the operation of a fairness heuristic-that procedural justice judgments mediate the effects of process impressions and outcome evaluations on the decision to accept or reject the directives of an authority. Participants in the studies were corporate and individual litigants in federal tort and contract actions that were subject to court-ordered arbitration. In both studies the decision to accept the arbitrator's award or reject it and go to trial was strongly correlated with judgments of procedural justice, and much or all of the effect of outcome evaluations and process impressions on award acceptance was mediated by procedural justice judgments, which had a stronger effect than either subjective or objective measures of the arbitration award. Separate analyses of corporate and individual decision makers in the second study suggested that both groups relied heavily on procedural justice judgments in deciding whether or not to accept the arbitration award. The findings provide evidence of widespread use of a heuristic and support the extension of justice-judgment research to corporate decision making.'