Affiliation Bias in Arbitration: An Experimental Approach

Sergio Puig and Anton Strezhnev

The Journal of Legal Studies, 2017, vol. 46, issue 2, 371 - 398

Abstract: A characteristic feature of arbitration, a growing form of legal adjudication, is that each disputing party appoints an arbitrator. Commentators, however, suggest that party-appointed arbitrators tend to be biased in favor of their appointers. Evaluating this claim from data on historical disputes is problematic because of nonrandom selection of arbitrators. Here we use a novel experimental approach to estimate the causal effect of the appointing party. Using survey experiments with arbitration experts around the world, we show that professional arbitrators suffer from affiliation effects--a cognitive predisposition to favor the appointing party. At a methodological level, we offer a solution to the problem of measuring this effect when credible observational designs are lacking.

Date: 2017
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