Information and Bargaining through Agents: Experimental Evidence from Mexico’s Labor Courts

Joyce Sadka, Enrique Seira and Christopher Woodruff

No 25137, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Well-functioning courts are essential for the health of both financial and real economies. Courts function poorly in most lower-income countries, but the root causes of poor performance are not well understood. We use a field experiment with ongoing cases to analyze sources of dysfunction in Mexico’s largest labor court. Providing the parties with personalized outcome predictions doubles settlement rates and reduces average case duration, but only when the worker is present to receive the information. An intervention before plaintiffs contact a lawyer increases pre-suit settlement. The experiment illuminates agency issues among plaintiffs with private lawyers. For most workers, the treatment appears to improve welfare, as measured by discounted payouts and ability to pay bills.

JEL-codes: K31 K41 O43 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-law
Note: DEV LE
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