Originally from American Review of International Arbitration - ARIA

Abstract
Empirical evidence indicates that national court judges fall prey to cognitive
biases and heuristics. The same may be assumed for international arbitrators.
Improving third-party adjudication through behaviorally informed rules on
procedure thus seems to be an avenue of research worth being pursued. In
applying behavioral law and economics to international commercial arbitration,
the present article shows (1) that behavioral economics can help to understand
arbitrators’ behaviour and (2) suggests how the law may mitigate their cognitive
biases and heuristics in order to design more effective, efficient, and fair arbitral
proceedings under the UNCITRAL Arbitration Rules. The article focuses on (i)
the representativeness heuristic, (ii) anchoring, (iii) the hindsight bias, (iv)
framing effects, and (v) the egocentric bias. Building on their underlying
dynamics and recent research on context-dependent decision-making,
corresponding de-biasing mechanisms may be implemented into arbitral
proceedings through either behaviorally informed (model) arbitration clauses or
by complementing existing frameworks such as the UNCITRAL Notes on
Organizing Arbitral Proceedings in a behaviorally informed manner. Hence, in
applying insights from economics and psychology to international arbitration, this
article adopts a prescriptive approach, examining how to actively mitigate
arbitrators’ cognitive shortcomings as much as possible. Accuracy in fact
determination – or the search for the truth – is perceived as the central motivation
of this approach. As prescriptive insights from behavioral economics are able to
allow for more accurate judgment, behaviorally informed rules on procedure not
only benefit disputing parties by enhancing due process, but in doing so, they also
empower international arbitration as a legal institution when confronted with
national legal systems.