Arbitration has become the de facto standard system of solving large transnational disputes. This success has, however, not extended to smaller domestic disputes. This article explores the idea that voluntary commercial arbitration, as currently understood, while well suited for large disputes between sophisticated parties, is not competitive in smaller disputes. It argues that the bargaining and information gathering costs inherent to setting up and operating a voluntary dispute resolution process tend to outstrip the gains of a more efficient dispute resolution system when the dispute is small. In this context, national courts usually provide a more beneficial option for parties. Finally, this article explores the idea that in the context of asymmetric levels of sophistication, arbitration might be selected by the parties as in those circumstances bargaining and information gathering costs are reduced. Arbitration in this context, might, however, give rise to concerns regarding the fairness and impartiality of the proceedings as the more experienced party might explore its knowledge edge and repeating-player status to its advantage.