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Rent Seeking and Bias in Appeals Systems

Author

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  • Tim Friehe

    (University of Marburg)

  • Ansgar Wohlschlegel

    (Portsmouth Business School)

Abstract

We analyze a litigation contest in which plaintiff and defendant seek to win in trial court, and the losing litigant may appeal. In our setup, the appeals court's judgment depends on the trial court's judgment, the merits of the litigants' arguments, and their efforts in the appeals stage. We find that the possibility of appeal increases the favorite's probability of winning as compared to that in a single-stage system, as the favorite has higher effort incentives in the first-instance authority than the underdog. Moreover, we show that the possibility of appeal may increase total rent-seeking efforts and make the case less likely to be tried, or that it surprisingly may have the opposite effects, and how the direction of these effects depends on the model parameters.

Suggested Citation

  • Tim Friehe & Ansgar Wohlschlegel, 2017. "Rent Seeking and Bias in Appeals Systems," Working Papers in Economics & Finance 2017-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    • Handle: RePEc:pbs:ecofin:2017-01
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    Cited by:

    1. Eisenkopf, Gerald & Friehe, Tim & Wohlschlegel, Ansgar, 2019. "On the role of emotions in experimental litigation contests," International Review of Law and Economics, Elsevier, vol. 57(C), pages 90-94.
    2. At Christian & Friehe Tim & Gabuthy Yannick, 2019. "On Lawyer Compensation When Appeals Are Possible," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-11, April.
    3. Baharad, Roy & Cohen, Chen & Nitzan, Shmuel, 2022. "Litigation with adversarial efforts," International Review of Law and Economics, Elsevier, vol. 69(C).

    More about this item

    Keywords

    Appeals; Litigation; Justice; Contest; Effort;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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