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Trust in the shadow of the courts if judges are no better

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  • Brennan, Geoffrey
  • Güth, Werner
  • Kliemt, Hartmut

Abstract

Can a court system conceivably control opportunistic behavior if judges are selected from the same population as ordinary citizens and thus are no better than the rest of us? This paper provides a new and, as we claim, quite profound rational choice answer to that unsolved riddle. Adopting an indirect evolutionary approach with endogenous preference formation the complex interactions between moral intrinsic motivation to behave non-opportunistically and extrinsic formal controls of opportunism are analysed. Under the assumption that judges are no better than ordinary citizens it is shown that introducing a court system can nevertheless prevent that the more trustworthy are driven out. It cannot be excluded, though, that courts may themselves crowd out trustworthiness under certain circumstances.

Suggested Citation

  • Brennan, Geoffrey & Güth, Werner & Kliemt, Hartmut, 1997. "Trust in the shadow of the courts if judges are no better," SFB 373 Discussion Papers 1997,44, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    • Handle: RePEc:zbw:sfb373:199744
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    References listed on IDEAS

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    1. Güth, W. & Kliemt, H., 1993. "Competition or Co-Operation," Discussion Paper 1993-39, Tilburg University, Center for Economic Research.
    2. Werner Güth & Hartmut Kliemt, 1994. "Competition Or Co-Operation: On The Evolutionary Economics Of Trust, Exploitation And Moral Attitudes," Metroeconomica, Wiley Blackwell, vol. 45(2), pages 155-187, June.
    3. Lindenberg, Siegwart, 1983. "Utility and Morality," Kyklos, Wiley Blackwell, vol. 36(3), pages 450-468.
    4. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-1053, July.
    5. Siegwart Lindenberg, 1983. "Utility and Morality," Kyklos, Wiley Blackwell, vol. 36(3), pages 450-468, August.
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    Cited by:

    1. Robert E. Goodin, 2000. "Trusting Individuals Versus Trusting Institutions," Rationality and Society, , vol. 12(4), pages 381-395, November.
    2. Güth, Werner, 1998. "Do banks crowd in or out business ethics? An indirect evolutionary analysis," SFB 373 Discussion Papers 1998,40, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.

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    More about this item

    Keywords

    Trust relationships; Evolutionary game theory; Intrinsic motivation; Court system; Legal litigation; Hobbesian problem of social order;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

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