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The appeals process: An empirical assessment

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  • Hüschelrath, Kai
  • Smuda, Florian

Abstract

The appeals process - whereby the losing party of an administrative or judicial decision can seek reconsideration of their arguments before a higher institution - is an important mechanism to correct legal errors and to improve existing laws and regulations. We use data of 467 firm groups that participated in 88 cartels convicted by the European Commission between 2000 and 2012 to study both the characteristics of firm groups filing an appeal and the factors that determine their successfulness in terms of fine reduction. Applying discrete choice models and a two-stage hurdle model, we find that while some characteristics - such as the size and financial condition of the firm group or the clarity of fine guidelines - only affect the probability to file an appeal, other factors such as the size of the fine imposed in connection to characteristics as ringleader, repeat offender or leniency applicant influence both the probability and the success of an appeal. We take our empirical results to derive conclusions for both firms and public policy makers.

Suggested Citation

  • Hüschelrath, Kai & Smuda, Florian, 2014. "The appeals process: An empirical assessment," ZEW Discussion Papers 14-063, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:14063
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    References listed on IDEAS

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    1. Theodore Eisenberg & Henry S. Farber, 2013. "Why Do Plaintiffs Lose Appeals? Biased Trial Courts, Litigious Losers, or Low Trial Win Rates?," American Law and Economics Review, American Law and Economics Association, vol. 15(1), pages 73-109.
    2. Steven Shavell, 2010. "On the Design of the Appeals Process: The Optimal Use of Discretionary Review versus Direct Appeal," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 63-108, January.
    3. Martin Carree & Andrea Günster & Maarten Schinkel, 2010. "European Antitrust Policy 1957–2004: An Analysis of Commission Decisions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(2), pages 97-131, March.
    4. Santolino, Miguel, 2010. "Determinants of the decision to appeal against motor bodily injury judgements made by Spanish trial courts," International Review of Law and Economics, Elsevier, vol. 30(1), pages 37-45, March.
    5. Shavell, Steven, 1995. "The Appeals Process as a Means of Error Correction," The Journal of Legal Studies, University of Chicago Press, vol. 24(2), pages 379-426, June.
    6. Bueren, Eckart & Hüschelrath, Kai & Veith, Tobias, 2014. "Time is money - how much money is time? Interest and inflation in competition law actions for damages," ZEW Discussion Papers 14-008, ZEW - Leibniz Centre for European Economic Research.
    7. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    8. Andrew F. Daughety & Jennifer F. Reinganum, 2000. "Appealing Judgments," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 502-526, Autumn.
    9. Steven Shavell, 2006. "The Appeals Process and Adjudicator Incentives," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 1-29, January.
    10. William J. Burke, 2009. "Fitting and interpreting Cragg's tobit alternative using Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 584-592, December.
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    Cited by:

    1. Sidorova, Elena & Golovanova, Svetlana & Avdasheva, Svetlana, 2019. "How to measure the quality of court decisions? A case of commercial courts," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 54, pages 126-143.
    2. S. Avdasheva & S. Golovanova & Y. Katsoulacos, 2019. "Optimal Institutional Structure of Competition Authorities Under Reputation Maximization: A Model and Empirical Evidence from the Case of Russia," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(2), pages 251-282, March.
    3. Hüschelrath, Kai & Laitenberger, Ulrich, 2015. "The settlement procedure in EC cartel cases: An empirical assesment," ZEW Discussion Papers 15-064, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Law and Economics; appeals; antitrust policy; cartels; European Union;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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