Experts and Arbitration Outcomes: Insights from Public Procurement Contract Disputes

TitleExperts and Arbitration Outcomes: Insights from Public Procurement Contract Disputes
Publication TypeWorking Paper
Year of Publication2022
AuthorsDetotto, C, Marselli, R, Mccannon, B, Vannini, M
Number22_04
ISBN Number978 88 68514 365
KeywordsArbitration; Expert; Italy; Principal-agent problem; Procurement contract
Abstract

We explore the use of experts in arbitration proceedings by analyzing public procurement contract disputes in Italy. Balancing cost with accuracy, participants to a contract select arbitration when speedy dispute resolution is valued highly. Alternative dispute resolution mechanisms tend to give appointed arbitrators discretion in how to proceed. Consequently, principal-agent problems can arise. Using an IV approach, we show that the use of an expert causes a slowing down of the case resolution, without having an effect on the outcome of the dispute nor resolving uncertainty as measured by unanimous decisions by the panel of arbitrators. Conflict resolution mechanism designers should consider the alignment of incentives between the disputants and the service providers.

Citation Key7365
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