Leniency Designs: An Operator's Manual

Paul Goldsmith-Pinkham, Peter Hull and Michal Kolesár

Journal of Economic Perspectives, 2026, vol. 40, issue 3, 213-40

Abstract: We develop a step-by-step guide to leniency (a.k.a. judge or examiner instrument) designs, drawing on recent econometric literatures. The unbiased jackknife instrumental variables estimator (UJIVE) is purpose-built for leveraging exogenous leniency variation, avoiding subtle biases even in the presence of many decision-makers or controls. We show how UJIVE can also be used to assess key assumptions underlying leniency designs, including quasi-random assignment and average first-stage monotonicity, and to probe the external validity of treatment effect estimates. We further discuss statistical inference, arguing that non-clustered standard errors are often appropriate. A reanalysis of Farre-Mensa et al. (2020), using quasi-random examiner assignment to estimate the value of patents to startups, illustrates our checklist.

JEL-codes: C13 C21 C26 D82 O34 (search for similar items in EconPapers)
Date: 2026
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Working Paper: Leniency Designs: An Operator's Manual (2026)
Working Paper: Leniency Designs: An Operator’s Manual (2025)
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DOI: 10.1257/jep.20251480

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