Arbitration from a Law & Economics Perspective
Draft for THE OXFORD HANDBOOK OF INTERNATIONAL ARBITRATION, Thomas Schultz & Federico Ortino (eds.), Oxford University Press
U of St.Gallen Law & Economics Working Paper No. 2016-07
Hebrew University of Jerusalem International Law Forum Working Series 07-16
28 Pages Posted: 28 Oct 2016 Last revised: 1 Nov 2016
Date Written: October 28, 2016
International arbitration and Law & Economics (L&E) have two things in common. They have both been on the rise in the last decades; and they are both hotly contested and discussed in all their facets. 15 years ago, it was lamented that L&E had neglected (international) arbitration to large extent, focusing instead on judicial contexts. This chapter analysis international arbitration from an L&E perspective, including subsequent developments by behavioral economics relevant to arbitration.
After providing a general institutional economics perspective on arbitration, we go into greater detail concerning some questions where L&E can contribute by focusing on disputants involved in arbitration, their incentives and decision-making, including among types of dispute settlement, arbitrator appointment, incentives for settlement and third-party funding. We also discuss the incentives and behavior of arbitrators, including their cognitive abilities.
Keywords: International Arbitration, Law & Economics, Behavioral Economics, arbitrator appointment, third party funding
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