Arbitration in economic disputes.

Authors
Publication date
2003
Publication type
Thesis
Summary Arbitration is an extrajudicial mode of conflict resolution which consists in resorting to a third person chosen by the parties to obtain a binding decision. This thesis is part of the body of economic work on arbitration by exploring the problem of conflict management from two different angles. On the one hand, starting from the observation that online commerce cannot be regulated by the traditional legal system, the first objective of this thesis is to analyze the effectiveness of a new electronic dispute resolution procedure: automated negotiation. On the other hand, considering that the recourse to arbitration cannot be explained only by a failure of negotiations, the second objective of this thesis is to base the existence of this procedure on its intrinsic qualities as a source of efficiency. This idea is analyzed by studying the role of arbitration as a substitute for full contracts. The theoretical analysis of automated bargaining shows that the "design" of this procedure has strategic implications that generate sub-efficient behavior on the part of individuals. The experimental analysis tends to qualify this result insofar as the conciliation effort of the parties depends significantly on the extent of the conflict between them. The role of arbitration as a substitute for full contracts is analyzed using a specific investment model. The efficiency of the arbitration procedure, as an incentive to invest, then depends on the arbitrator's behavior and the degree of specificity characterizing the relationship between the parties.
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