“This is not like having judges, who get paid the same no matter what happens,” says Stanford Graduate School of Business finance professor Amit Seru, who collaborated on the study with Mark Egan at Harvard Business School and Gregor Matvos at the University of Texas at Austin. “Here, you only get paid if you’re selected as an arbitrator. They have incentives to slant toward the business side, because they know that those who don’t do so won’t get picked. Everyone knows what’s happening.”
Binding arbitration is terrible for consumers: