IDEAS home Printed from https://ideas.repec.org/a/bpj/ajlecn/v11y2020i1p9n2.html
   My bibliography  Save this article

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:2
    DOI: 10.1515/ajle-2019-0031
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ajle-2019-0031
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ajle-2019-0031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Baik, Kyung Hwan & Lee, Sanghack, 2007. "Collective rent seeking when sharing rules are private information," European Journal of Political Economy, Elsevier, vol. 23(3), pages 768-776, September.
    2. Kyung Hwan Baik & Jihyun Kim, 2014. "Contests with Bilateral Delegation: Unobservable Contracts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 387-405, September.
    3. Nitzan, Shmuel & Ueda, Kaoru, 2011. "Prize sharing in collective contests," European Economic Review, Elsevier, vol. 55(5), pages 678-687, June.
    4. Byung In Lim & Jason Shogren, 2004. "Unilateral delegation and reimbursement systems in an environmental conflict," Applied Economics Letters, Taylor & Francis Journals, vol. 11(8), pages 489-493.
    5. Levent Koçkesen & Efe A. Ok, 2004. "Strategic Delegation By Unobservable Incentive Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 397-424.
    6. Lambert Schoonbeek, 2002. "A delegated agent in a winner-takes-all contest," Applied Economics Letters, Taylor & Francis Journals, vol. 9(1), pages 21-23.
    7. Sung-Hoon Park, 2010. "Asymmetric reimbursement system in an environmental conflict," Applied Economics Letters, Taylor & Francis Journals, vol. 17(12), pages 1197-1199.
    8. Park Sung-Hoon & Lee Sanghack, 2019. "How Do Risk-Averse Litigants Set Contingent Fees for Risk-Neutral Lawyers?," Review of Law & Economics, De Gruyter, vol. 15(2), pages 1-19, July.
    9. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-898, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Sung-Hoon Park & Jason F. Shogren, 2021. "A Virtuous Circle of Governance Contests with Externalities," Sustainability, MDPI, vol. 13(14), pages 1-12, July.
    3. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    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. Kyung Hwan Baik & Sang-Kee Kim, 2020. "Observable versus unobservable R&D investments in duopolies," Journal of Economics, Springer, vol. 130(1), pages 37-66, June.
    4. Kyung Hwan Baik & Dongryul Lee, 2020. "Decisions of Duopoly Firms on Sharing Information on Their Delegation Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(1), pages 145-165, August.
    5. Heinrich Ursprung, 2012. "The evolution of sharing rules in rent seeking contests: Incentives crowd out cooperation," Public Choice, Springer, vol. 153(1), pages 149-161, October.
    6. Kyung Hwan Baik, 2007. "Equilibrium Contingent Compensation in Contests with Delegation," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 986-1002, April.
    7. Kyung Hwan Baik & Jong Hwa Lee, 2013. "Endogenous Timing In Contests With Delegation," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 2044-2055, October.
    8. repec:zbw:rwirep:0270 is not listed on IDEAS
    9. Shmuel Nitzan & Kaoru Ueda, 2014. "Intra-group heterogeneity in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 219-238, June.
    10. Priks, Mikael, 2011. "Firm competition and incentive pay: Rent seeking at work," Economics Letters, Elsevier, vol. 113(2), pages 154-156.
    11. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    12. Rusche, Christian, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 270, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Gürtler, Oliver, 2006. "Contractual Incentive Provision and Commitment in Rent-Seeking Contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 100, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    14. repec:elg:eechap:15325_6 is not listed on IDEAS
    15. Pau Balart & Sabine Flamand & Orestis Troumpounis, 2016. "Strategic choice of sharing rules in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 239-262, February.
    16. NITZAN, Shmuel & UEDA, Kaoru, 2016. "Selective Incentives and Intra-Group Heterogeneity in Collective Contents," Discussion paper series HIAS-E-24, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    17. Pau Balart & Sabine Flamand & Oliver Gürtler & Orestis Troumpounis, 2018. "Sequential choice of sharing rules in collective contests," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(5), pages 703-724, October.
    18. Maria Arbatskaya & Hideo Konishi, 2021. "Dynamic Team Contests with Complementary Efforts," Boston College Working Papers in Economics 1033, Boston College Department of Economics.
    19. Martin Kolmar & Andreas Wagener, 2013. "Inefficiency As A Strategic Device In Group Contests Against Dominant Opponents," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 2083-2095, October.
    20. Sung-Hoon Park & Chad Settle, 2022. "Internalizing environmental damages and endogenous reimbursement in environmental conflicts: a game-theoretic analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 547-569, December.
    21. Pau Balart & Sabine Flamand & Orestis Troumpounis, 2014. "Strategic choice of sharing rules in collective contests," Working Papers 64402108, Lancaster University Management School, Economics Department.
    22. Vázquez-Sedano Alexis, 2018. "Sharing the Effort Costs in Group Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(1), pages 1-21, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:ajlecn:v:11:y:2020:i:1:p:9:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.