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Private Selection and Arbitration Neutrality

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  • Klement, Alon
  • Neeman, Zvika

Abstract

This paper examines the effects that the private selection of arbitrators have over arbitrators' incentives in deciding the cases before them over the arbitrators' implied bias. These effects have important implications for the design of Arbitration rules by Arbitration and Dispute Resolution providers as well as by other organizations that rely on arbitration for the resolution of disputes among their members. We show that private selection of arbitrators might adversely affect the accuracy of arbitrators' decisions because arbitrators might want to make an incorrect decision when a correct decision would carry the inference that they are biased. We compare the accuracy of arbitrators' decisions under different arbitrator selection procedures.

Suggested Citation

  • Klement, Alon & Neeman, Zvika, 2011. "Private Selection and Arbitration Neutrality," Working Paper Series 19179, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    • Handle: RePEc:vuw:vuwcsr:19179
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/19179
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    References listed on IDEAS

    as
    1. Gibbons, Robert, 1988. "Learning in Equilibrium Models of Arbitration," American Economic Review, American Economic Association, vol. 78(5), pages 896-912, December.
    2. repec:fth:prinin:163 is not listed on IDEAS
    3. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(4), pages 819-844, July.
    4. Bloom, David E, 1986. "Empirical Models of Arbitrator Behavior under Conventional Arbitration," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 578-585, November.
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    6. Kaplow, Louis, 1994. "The Value of Accuracy in Adjudication: An Economic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 307-401, January.
    7. Kaplow, Louis & Shavell, Steven, 1994. "Accuracy in the Determination of Liability," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 1-15, April.
    8. Orley Ashenfelter & David Bloom, 1983. "The Pitfalls in Judging Arbitrator Impartiality by Win-Loss Tallies Under Final-Offer Arbitration," Working Papers 543, Princeton University, Department of Economics, Industrial Relations Section..
    9. Kaplow, Louis & Shavell, Steven, 1996. "Accuracy in the Assessment of Damages," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 191-210, April.
    10. Daniel R. Marburger, 2004. "Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 60-68, January.
    11. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(6), pages 1503-1528, November.
    12. Orley Ashenfelter & David Bloom, 1983. "The Pitfalls in Judging Arbitrator Impartiality by Win-Loss Tallies Under Final-Offer Arbitration," Working Papers 543, Princeton University, Department of Economics, Industrial Relations Section..
    13. Donald Wittman, 2003. "Lay Juries, Professional Arbitrators, and the Arbitrator Selection Hypothesis," American Law and Economics Review, American Law and Economics Association, vol. 5(1), pages 61-93.
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