Inelastic incoherent neutron scattering studies of vibrational spectra (2-400 meV) were carried out on the atomically ordered phase of palladium-silver hydrides synthesized under a high pressure of gaseous hydrogen. The results showed a large difference betwen the Pd-H and Ag-H interactions in the hydrides. The optic-phonon group was found to be split into two peaks. One peak was positioned at about the same energy as the peak from the transverse optic modes in PdH_x whereas the other had a much higher energy and originated from the Ag-H interaction. The experimental spectrum of nearly stoichiometric PdAgH_0.86 was fitted using a conventional Born-von Karman model. The value of about 93 meV was predicted for the local hydrogen vibrations in dilute Ag-H solid solutions.