Aoki Seminar: Professor Andrea Chandrasekher “Empirically Investigating the Source of the Repeat Player Effect in Consumer Arbitration” _3/19/2019

“Empirically Investigating the Source of the Repeat Player Effect in Consumer Arbitration” The paper is co-authored with Professor David Horton Sometimes quantitative research may seem dry or unconnected to critical race theory. However, often it has an important impact on racial justice. What Professor Chandrasekher” demonstrates is that companies have a significant advantage in arbitration and that individual employees and consumers, many of them low-income or folks of color, are at a decided disadvantage. How do we change the rules of the game to avoid this unfairness? “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 emanates largely from company-specific characteristics such greater financial resources and access to elite counsel. The Article concludes by exploring the implications of this discovery for the broader debate over forced arbitration and class actions.”