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Tipping the Scales – Conciliation, Appeal and the Relevance of Judicial Ambition

Robin Christmann ()
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Robin Christmann: Helmut Schmidt University, Hamburg, Postal: Professur für politische Ökonomik und empirische Wirtschaftsforschung, Holstenhofweg 85, 22043 Hamburg

No 137/2013, Working Paper from Helmut Schmidt University, Hamburg

Abstract: Judges become ambitious decision makers when they face appellate review. This paper applies a contract theoretic perspective to the behavior of self-interested trial judges in a two-level court system and analyzes the consequences for contracting in “the shadow of” the court. Confronted with the factual ambiguity of an assigned case, rational judges pursue an (privately) optimal strategy to conclude the dispute and tip the scales of the trial outcome. We show that even if judges generally dislike errors and have no personal preference for a specific party, these effects of judicial agency manipulate the implemented court accuracy and degrade the contract outcome. Our implications put into perspective the traditional function of appellate courts to foster the accuracy of enforcement and identify the need for a complex measurement of judicial performance. The model also reveals that a judicial tendency to conclude lawsuits in the conciliatory hearing may overly strain contract output.

Keywords: court error; judicial behavior; reputation; contract theory (search for similar items in EconPapers)
JEL-codes: C72 K12 K41 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2013-12-17
New Economics Papers: this item is included in nep-law
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