Private Selection and Arbitration Neutrality

Abstract

This seminar examines the effects that the private selection of arbitrators has over arbitrators' incentives in deciding the cases before them and 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 organisations that rely on arbitration for the resolution of disputes among their members. Professor Klement shows that private selection of arbitrators might adversely affect the accuracy of arbitrators' decisions because arbitrators might want to make a incorrect decision when a correct decision would carry the inference that they are biased. He compares the accuracy of arbitrators' decisions under different arbitrator selection procedures.