Tipping the Scales – Conciliation, Appeal and the Relevance of Judicial Ambition
AbstractJudges become ambitious decision makers when they face appellate review. This paper applies a contract theoretic perspective to the behavior of self-interested trial judges in a two-level court system and analyzes the consequences for contracting in “the shadow of” the court. Confronted with the factual ambiguity of an assigned case, rational judges pursue an (privately) optimal strategy to conclude the dispute and tip the scales of the trial outcome. We show that even if judges generally dislike errors and have no personal preference for a specific party, these effects of judicial agency manipulate the implemented court accuracy and degrade the contract outcome. Our implications put into perspective the traditional function of appellate courts to foster the accuracy of enforcement and identify the need for a complex measurement of judicial performance. The model also reveals that a judicial tendency to conclude lawsuits in the conciliatory hearing may overly strain contract output.
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Bibliographic InfoPaper provided by Helmut Schmidt University, Hamburg in its series Working Paper with number 137/2013.
Length: 50 pages
Date of creation: 17 Dec 2013
Date of revision:
court error; judicial behavior; reputation; contract theory;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
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