IDEAS home Printed from https://ideas.repec.org/p/bru/bruedp/06-09.html
   My bibliography  Save this paper

Reputational Concerns and Bias in Arbitration

Author

Listed:
  • Elisabetta Iossa

    ()

  • Giuliana Palumbo

Abstract

We analyze how reputational concerns of arbitrators affect the quality of their decision making. We assume that arbitrators differ in their ability to evaluate the correct decision and that information acquisition by arbitrators is costly and unobservable. We show that reputational concerns increase incentives for information acquisition but may induce the arbitrator to bias his decision towards one party in the dispute.This decision bias is greater when the dispute is confidential rather than when it is public, and the parties are more likely to choose confidentiality for less complex subject matters. In light of these results, we study the circumstances under which the parties to a contract choose to employ arbitration, rather than litigation in court, to resolve their disputes. We show that arbiration is more likely to be chosen by symmetric and long-lived parties.enough.

Suggested Citation

  • Elisabetta Iossa & Giuliana Palumbo, 2006. "Reputational Concerns and Bias in Arbitration," Economics and Finance Discussion Papers 06-09, Economics and Finance Section, School of Social Sciences, Brunel University.
  • Handle: RePEc:bru:bruedp:06-09
    as

    Download full text from publisher

    File URL: http://www.brunel.ac.uk/329/efwps/ReputationalConcernsandBiasinArbitration.pdf
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bru:bruedp:06-09. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John.Hunter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.