Hundreds of millions of consumer and employment contracts include arbitration clauses, class arbitration waivers, and … interpretation of the Federal Arbitration Act (FAA). For decades, scholars have criticized the Court’s arbitration jurisprudence for … rules through the mechanism of contracting - a process normally rooted in mutual consent - the Court’s arbitration case law …

contracting problems. We show that these mechanisms — which are based on off-equilibrium arbitration clauses that impose large … fines for lying and the inappropriate use of arbitration — have severe behavioral constraints because the fines induce … retaliation against legitimate uses of arbitration. Incorporating reciprocity preferences into the theory explains the observed …