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Information and Bargaining through Agents: Experimental Evidence from Mexico's Labor Courts

Author

Listed:
  • Sadka, Joyce
  • Seira, Enrique
  • Woodruff, Christopher

Abstract

While observers agree that courts function poorly in developing countries, a lack of data has limited our understanding of the causes of malfunction. We combine data from admin- istrative records on severance cases filed in the Mexico City Labor Court with interventions that provide information to parties in randomly selected cases on predicted case outcomes and conciliation services. We first use the data to document a set of stylized facts about the func- tioning of the court. The interventions nearly double the overall settlement rate, but only when the plaintiff herself is present to receive the information directly. Administrative records from six months after the treatment indicate that the treatment effects remain unchanged over that period, even though an additional one in three cases in the control group settle in that period. The post-treatment results indicate that lawyers do not convey the information provided in the intervention to their clients. A simple analytic framework rationalizes the experimental results. Analysis of settlements induced by the interventions suggests that the provision of information is welfare-improving for the plaintiffs. The experimental results replicate over two phases conducted in different sub-courts, showing robustness.

Suggested Citation

  • Sadka, Joyce & Seira, Enrique & Woodruff, Christopher, 2018. "Information and Bargaining through Agents: Experimental Evidence from Mexico's Labor Courts," CEPR Discussion Papers 13261, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13261
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    References listed on IDEAS

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    1. Florence Kondylis & Mattea Stein, 2018. "The Speed of Justice," Working Papers halshs-01735025, HAL.
    2. Jacopo Ponticelli & Leonardo S. Alencar, 2016. "Court Enforcement, Bank Loans, and Firm Investment: Evidence from a Bankruptcy Reform in Brazil," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1365-1413.
    3. Jishnu Das & Alaka Holla & Aakash Mohpal & Karthik Muralidharan, 2016. "Quality and Accountability in Health Care Delivery: Audit-Study Evidence from Primary Care in India," American Economic Review, American Economic Association, vol. 106(12), pages 3765-3799, December.
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    More about this item

    Keywords

    firingdisputes; laborcourts; overconfidence; Settlement; statisticalinformation;
    All these keywords.

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor 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

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