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Legal Contests with Unilateral Delegation

Author

Listed:
  • Park Sung-Hoon

    (Chosun University, Department of Economics, Gwangju, Korea (the Republic of))

  • Lee Sanghack

    (Kookmin University, Department of International Commerce, Seongbok-gu, Korea (the Republic of))

Abstract

We examine a legal contest in which only one litigant hires a delegate who expends his effort on behalf of the litigant. The delegation contract between the litigant and the delegate is either observable or unobservable. Comparing the equilibrium outcomes of the two legal contests, we derive the effect of the observability of the contract. We find that the favorite litigant and his delegate prefer the observable contract to the unobservable one. If the litigant is the underdog, however, there is conflict of interest between the litigant and his delegate as the litigant prefers the observable contract to the unobservable one while his delegate prefers the unobservable contract. We also show that the legal contest with the observable contract incurs more total expenditure than the legal contest with the unobservable contract if the litigant hiring the delegate is the favorite, and vice versa.

Suggested Citation

  • Park Sung-Hoon & Lee Sanghack, 2020. "Legal Contests with Unilateral Delegation," Asian Journal of Law and Economics, De Gruyter, vol. 11(1), pages 1-9, April.
    • Handle: RePEc:bpj:ajlecn:v:11:y:2020:i:1:p:9:n:1
    DOI: 10.1515/ajle-2019-0031
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    Cited by:

    1. Sung-Hoon Park & Jason F. Shogren, 2021. "A Virtuous Circle of Governance Contests with Externalities," Sustainability, MDPI, vol. 13(14), pages 1-12, July.
    2. Sung-Hoon Park & Chad E. Settle, 2023. "Asymmetric Reimbursement and Contingent Fees in Environmental Conflicts: Observable vs. Unobservable Contracts," Games, MDPI, vol. 14(4), pages 1-10, July.
    3. Sung-Hoon Park, 2022. "Contingent fees and endogenous timing in litigation contests," European Journal of Law and Economics, Springer, vol. 54(3), pages 453-473, December.

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