Ludivine Roussey and
Raphael Soubeyran ()
International Review of Law and Economics, 2018, vol. 55, issue C, 21-32
We develop a double-sided moral hazard model in which the production of justice depends on two tasks (jurisdictional and administrative). The jurisdictional task can be provided only by a judge (the agent) while the administrative task can be provided either by the government (the principal) and/or by the judge. However, the judge performs the administrative task at a higher unit cost. First, we show that the first-best situation is such that the judge exerts no effort to provide the administrative task. Second, we show that two forms of (second-best) optimal contract can emerge when neither the government's effort nor the judge's effort is contractible: either the incentives are shared between the government and the judge and the judge exerts no effort to provide the administrative task, or the judge faces high-powered incentives which induce her to exert effort to provide both tasks. Our model proposes a rationale for judges work overload observed in many countries.
Keywords: Double-sided moral hazard; Task misallocation; Judicial organization; Production of judicial services (search for similar items in EconPapers)
JEL-codes: D20 D86 K40 (search for similar items in EconPapers)
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Working Paper: Overburdened judges (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:55:y:2018:i:c:p:21-32
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