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Matching with Moral Hazard: Assigning Attorneys to Indigent Defendants

Author

Listed:
  • Behrang Kamali-Shahdadi

    (Department of Economics, TeIas Institute)

Abstract

Each year, over a hundred thousand defendants who are too poor to pay for a lawyer are assigned counsel. Existing procedures for making such assignments are essentially random and have been criticized for giving indigent defendants no say in choosing the counsel they are assigned to. In this paper, we model the problem of assigning counsel to indigent defendants as a matching problem. A novel aspect of this matching problem is the moral hazard component on the part of counsel. Within the model, we show that holding the total expenditure for counsel fixed and changing the matching procedure to accommodate defendants' and attorneys' preferences will make defendants worse off. More precisely, if we switch from random matching to stable matching, defendants become worse off because stable matching exacerbates the moral hazard problem on the part of counsel. In addition, we find conditions on reservation wages of attorneys under which random matching is the efficient way to allocate defendants to counsel.

Suggested Citation

  • Behrang Kamali-Shahdadi, 2015. "Matching with Moral Hazard: Assigning Attorneys to Indigent Defendants," PIER Working Paper Archive 15-029, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 02 Sep 2015.
    • Handle: RePEc:pen:papers:15-029
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    References listed on IDEAS

    as
    1. Radha Iyengar, 2007. "An Analysis of the Performance of Federal Indigent Defense Counsel," NBER Working Papers 13187, National Bureau of Economic Research, Inc.
    2. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    3. Rogerson, William P, 1985. "Repeated Moral Hazard," Econometrica, Econometric Society, vol. 53(1), pages 69-76, January.
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    More about this item

    Keywords

    Matching; Moral Hazard; Contract; Indigent Defense;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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