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Information Provision and Monitoring of the Decision-Maker in the Presence of an Appeal Process

Listed author(s):
  • Elisabetta Iossa
  • Giuliana Palumbo

We consider a setting where a decision-maker has to resolve a dispute between two parties. On demand of the losing party, the decision may be subject to review by an appellate body. The decision-maker has discretionary power and may be opportunistic. Depending on the institution design, information on the dispute is provided either by the parties themselves or by an independent investigator. We show that information provision by the parties generates more efficient monitoring through appeals and less opportunism by the decision-maker than information provision by the investigator. We discuss our results in light of the adversarial-versus-inquisitorial controversy.

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Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 163 (2007)
Issue (Month): 4 (December)
Pages: 657-682

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200712)163:4_657:ipamot_2.0.tx_2-s
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  1. 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.
  2. Hyun Song Shin, 1998. "Adversarial and Inquisitorial Procedures in Arbitration," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 378-405, Summer.
  3. Jean-Jacques Laffont & David Martimort, 1999. "Separation of Regulators Against Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 232-262, Summer.
  4. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
  5. Palumbo, Giuliana, 2006. "Optimal duplication of effort in advocacy systems," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 112-128, May.
  6. Miceli, Thomas J. & Cosgel, Metin M., 1994. "Reputation and judicial decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 31-51, January.
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