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Decision Rules in a Judicial Hierarchy

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  • Charles M. Cameron
  • Lewis A. Kornhauser

Abstract

This paper extends the analysis of the structure of judicial hierarchies to environments in which litigants may have asymmetric information about the merits of the case. We identify equilibria in which the error rate is zero. In each equilibrium, at least one of the inferior courts does not decide cases on the basis of its prior beliefs. Rather, in the absence of an informative signal, an inferior court decides against the informed litigant in order to exploit that litigant's knowledge.

Suggested Citation

  • Charles M. Cameron & Lewis A. Kornhauser, 2005. "Decision Rules in a Judicial Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 264-264, June.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200506)161:2_264:driajh_2.0.tx_2-v
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    References listed on IDEAS

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    1. Shavell, Steven, 1997. "The Fundamental Divergence between the Private and the Social Motive to Use the Legal System," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 575-612, June.
    2. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    3. A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, pages 562-570.
    4. Che, Yeon-Koo & Yi, Jong Goo, 1993. "The Role of Precedents in Repeated Litigation," Journal of Law, Economics, and Organization, Oxford University Press, vol. 9(2), pages 399-424, October.
    5. Kornhauser, Lewis A & Revesz, Richard L, 1994. "Multidefendant Settlements: The Impact of Joint and Several Liability," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 41-76, January.
    6. Che, Yeon-Koo, 1996. "Equilibrium formation of class action suits," Journal of Public Economics, Elsevier, vol. 62(3), pages 339-361, November.
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    Citations

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    Cited by:

    1. Yves Oytana, 2014. "The Judicial Expert in a Two-Tier Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 537-570, September.
    2. Christoph Engel & Urs Schweizer, 2005. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 191-191, June.
    3. 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.

    More about this item

    JEL classification:

    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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