Individual vs. group decision-making: Evidence from a natural experiment in arbitration proceedings
نویسندگان
چکیده
• The study identifies systematic group polarization in arbitrators’ decisions. Results are based on awards customer vs firm disputes the U.S. financial industry. Evidence suggests that groups mitigate individual reputation concerns. This is consistent with idea provide a ‘shield of anonymity’. importance understanding differences between and decisions has been well recognized literature. However, vast majority empirical evidence this issue derived from laboratory experiments, hence does not reflect professional incentives career concerns, both which may play crucial role. To fill gap, I exploit unique regulatory change exogenously decreased number presiding arbitrators three to one for specific class cases Financial Industry Regulatory Authority arbitration an original data set awards. findings indicate panels render more extreme “all or nothing” compared sole arbitrators. An arbitrator fixed effects model confirms tendency also present within arbitrators, thus ruling out effect driven by differential selection into panels. Rather, “shield anonymity” mitigates their concerns about adverse reputational
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ژورنال
عنوان ژورنال: Journal of Public Economics
سال: 2021
ISSN: ['0047-2727', '1879-2316']
DOI: https://doi.org/10.1016/j.jpubeco.2021.104479