Experts and Arbitration Outcomes: Insights from Public Procurement Contract Disputes
|Title||Experts and Arbitration Outcomes: Insights from Public Procurement Contract Disputes|
|Publication Type||Working Paper|
|Year of Publication||2022|
|Authors||Detotto, C, Marselli, R, McCannon, BC, Vannini, M|
|ISBN Number||978 88 68514 365|
|Keywords||Arbitration; Expert; Italy; Principal-agent problem; Procurement contract|
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.