Empirically Investigating the Source of the Repeat Player Effect in Consumer Arbitration

29 Pages Posted: 5 Dec 2019

See all articles by Andrea Chandrasekher

Andrea Chandrasekher

University of California, Davis - School of Law

David Horton

University of California, Davis - School of Law

Date Written: November 19, 2019

Abstract

Policymakers, courts, and scholars have long been interested in whether repeat players enjoy an advantage in forced arbitration. Sophisticated empirical studies of consumer and employment awards reveal that there is indeed a repeat player effect: even controlling for other factors, companies that arbitrate more than once boast higher win rates than one-shot firms. However, researchers have not yet tried to determine whether this repeat player effect is a product of experience within the arbitral forum (the “experience” hypothesis) or characteristics of the repeat playing companies themselves (the “defendant-specific” hypothesis). This Article begins to address this issue by analyzing 4,570 consumer arbitration awards from the American Arbitration Association. Using a unique regression specification that includes both discrete and continuous random variables (a combination of functional forms not used in previous literature), it finds that the repeat player effect is more consistent with the defendant-specific hypothesis than it is with the experience hypothesis. Indeed, to the extent that repeat-playing businesses enjoy an advantage in arbitration, it likely emanates from company-specific characteristics.

Keywords: arbitration, FAA, repeat-player, repeat player, empirical, AAA, American Arbitration Association, AAA

Suggested Citation

Chandrasekher, Andrea and Horton, David, Empirically Investigating the Source of the Repeat Player Effect in Consumer Arbitration (November 19, 2019). Available at SSRN: https://ssrn.com/abstract=3489596 or http://dx.doi.org/10.2139/ssrn.3489596

Andrea Chandrasekher

University of California, Davis - School of Law ( email )

Martin Luther King, Jr. Hall
Davis, CA CA 95616-5201
United States

David Horton (Contact Author)

University of California, Davis - School of Law ( email )

Martin Luther King, Jr. Hall
Davis, CA CA 95616-5201
United States

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