IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Rent Seeking and Judicial Bias in Weak Legal Systems

  • Peter Bardsley
  • Quan Nguyen

We model rent seeking in litigation in weak legal systems as a Tulloch contest in which litigators may seek to influence the court directly through bribery as well as through the merit of the legal case that they bring. If the local firm has a competitive advantage in influencing the court then there is a strategic asymmetry between the players: the local firm regards expenditure by the foreign firm as a strategic complement, but the foreign firm regards local expenditure as a strategic substitute. This leads to different attitudes to commitment: the local firm would like to commit to a high level of effort to influence the court, the foreign firm to a low one. There is also an asymmetry in the commitment technology. It is not easy to commit to a low level of bribery, but it is feasible to commit to a high one: once a payment is made it cannot easily be recovered. We model the interaction as a two stage game: the players simultaneously commit to a minimum level of effort, then they play a simultaneous Tulloch influence game. We find a continuum of equilibria. An equilibrium selection argument selects a unique equilibrium that is outcome equivalent to the Stackelberg equilibrium of a simple Tulloch contest in which the local firm moves first. We thus find an argument for endogenous timing: the local firm moves first and secures a first mover advantage.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-05/925.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.economics.unimelb.edu.au/downloads/wpapers-05/925.pdf [301 Moved Permanently]--> http://fbe.unimelb.edu.au/economics/downloads/wpapers-05/925.pdf). If this is indeed the case, please notify (Aminata Doumbia)


Download Restriction: no

Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 925.

as
in new window

Length: 16 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:mlb:wpaper:925
Contact details of provider: Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Web page: http://www.economics.unimelb.edu.auEmail:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. van Damme, E.E.C. & Hurkens, J.P.M., 1996. "Endogenous Stackelberg Leadership," Discussion Paper 1996-115, Tilburg University, Center for Economic Research.
  2. Daniel Kaufmann & Shang-Jin Wei, 2000. "Does 'Grease Money' Speed Up the Wheels of Commerce?," IMF Working Papers 00/64, International Monetary Fund.
  3. Vai-Lam Mui, 1999. "Contracting in the Shadow of a Corrupt Court," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(2), pages 249-, June.
  4. repec:ner:tilbur:urn:nbn:nl:ui:12-154410 is not listed on IDEAS
  5. Farmer, Amy & Pecorino, Paul, 1999. " Legal Expenditure as a Rent-Seeking Game," Public Choice, Springer, vol. 100(3-4), pages 271-88, September.
  6. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
  7. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
  8. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:925. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aminata Doumbia)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.