Working Paper: CEPR ID: DP8724
Authors: Geoffroy de Clippel; Kfir Eliaz; Brian Knight
Abstract: A key issue in arbitration, which resolves disputes among parties, involves the procedure for selecting an arbitrator. We take an implementation-theoretic approach and provide theoretical, empirical and experimental analyses of this problem. Our findings highlight the problems with current procedures and suggest that alternative procedures, which we propose, may be superior.
Keywords: Arbitration; Implementation
JEL Codes: C72; C92; D02
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| prevalent mechanism for selecting arbitrators (D47) | Pareto efficiency (D61) |
| non-truthful behavior is prevalent (Z13) | truthful reporting is not a Nash equilibrium (C72) |
| alternative sequential mechanisms (C69) | efficiency and compliance with SCR (D61) |
| truthful reporting (Y30) | appointed arbitrator will Pareto dominate both parties' median choices (D79) |
| existing simultaneous mechanisms (C30) | inefficient outcomes (D61) |