Pub Date : 2025-03-01Epub Date: 2024-11-16DOI: 10.1016/j.irle.2024.106236
Johan Callermo
This paper studies references to case law in merger control decisions by the EC Directorate General for Competition (DG COMP) in 1990–2022. I use the full set of references to Court of Justice of the European Union (CJEU) judgments in DG COMP decisions to examine implementation, industry dynamics and effects of the 2004 merger control reform. New case law is shown to be immediately incorporated into the merger control practice without a learning period, subsequent citations correlate with industry-specific merger activity and the 2004 ECMR reform changed which judgments are frequently cited. European merger control should thus be viewed as a dynamic framework rather than constant in time and across industries. When controlling for quantifiable determinants of case law citations, the ceteris paribus relevance of case law is constant for 20–25 years, implying that judgments do not intrinsically lose relevance over time.
{"title":"Case law in European merger control","authors":"Johan Callermo","doi":"10.1016/j.irle.2024.106236","DOIUrl":"10.1016/j.irle.2024.106236","url":null,"abstract":"<div><div>This paper studies references to case law in merger control decisions by the EC Directorate General for Competition (DG COMP) in 1990–2022. I use the full set of references to Court of Justice of the European Union (CJEU) judgments in DG COMP decisions to examine implementation, industry dynamics and effects of the 2004 merger control reform. New case law is shown to be immediately incorporated into the merger control practice without a learning period, subsequent citations correlate with industry-specific merger activity and the 2004 ECMR reform changed which judgments are frequently cited. European merger control should thus be viewed as a dynamic framework rather than constant in time and across industries. When controlling for quantifiable determinants of case law citations, the <em>ceteris paribus</em> relevance of case law is constant for 20–25 years, implying that judgments do not intrinsically lose relevance over time.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"81 ","pages":"Article 106236"},"PeriodicalIF":0.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142700071","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2025-01-06DOI: 10.1016/j.irle.2025.106245
Jesse Bull
Although prohibited, jurors sometimes condition, consciously or subconsciously, their belief that a defendant is guilty on the defendant’s race or ethnicity or other observable characteristics. This can be viewed as a juror forming a prior or pre-trial/evidence disclosure belief of guilt. In doing this, they rely on their perceptions of education, socio-economic status, religion, beliefs, networks, etc. for the defendant’s race (or other observable characteristic) and how they perceive those to influence the probability the defendant is guilty. This is consistent with aversive discrimination, which suggests that people want to be egalitarian and not condition on race but have a tendency to base decisions on factors that are discriminatory when race is not salient. When this prior or pre-trial/evidence disclosure belief of guilt overestimates the prior probability of guilt for those in the minority group, it underestimates the prior probability of guilt for those in the majority group. Prohibiting conditioning on observable defendant characteristics can be viewed as requiring the use of the population prior/pre-trial probability of guilt. Conditions for when such prohibition improves accuracy are provided. While it is difficult to effectively prohibit this, studies of aversive discrimination suggest that making race salient in a trial can reduce implicit bias on race. So these results may provide some guidance on when such activity should be permitted.
{"title":"Jury priors and observable defendant characteristics","authors":"Jesse Bull","doi":"10.1016/j.irle.2025.106245","DOIUrl":"10.1016/j.irle.2025.106245","url":null,"abstract":"<div><div>Although prohibited, jurors sometimes condition, consciously or subconsciously, their belief that a defendant is guilty on the defendant’s race or ethnicity or other observable characteristics. This can be viewed as a juror forming a prior or pre-trial/evidence disclosure belief of guilt. In doing this, they rely on their perceptions of education, socio-economic status, religion, beliefs, networks, etc. for the defendant’s race (or other observable characteristic) and how they perceive those to influence the probability the defendant is guilty. This is consistent with aversive discrimination, which suggests that people want to be egalitarian and not condition on race but have a tendency to base decisions on factors that are discriminatory when race is not salient. When this prior or pre-trial/evidence disclosure belief of guilt overestimates the prior probability of guilt for those in the minority group, it underestimates the prior probability of guilt for those in the majority group. Prohibiting conditioning on observable defendant characteristics can be viewed as requiring the use of the population prior/pre-trial probability of guilt. Conditions for when such prohibition improves accuracy are provided. While it is difficult to effectively prohibit this, studies of aversive discrimination suggest that making race salient in a trial can reduce implicit bias on race. So these results may provide some guidance on when such activity should be permitted.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"81 ","pages":"Article 106245"},"PeriodicalIF":0.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143180526","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2024-12-28DOI: 10.1016/j.irle.2024.106244
María C. Avramovich
This paper investigates the effects of disclosing information about the likelihood of an inspection on the sustainability of cartels. To this end, I develop a model in which the Antitrust Authority can credibly disclose this type of information before firms make strategic decisions. In this way, the Antitrust Authority can distort the optimal behavior of the cartel firms related to production and cartel activities between inspection periods and non-inspection periods. I show how this can destabilize some cartel agreements, but it can also create productive inefficiencies not considered in standard models of collusion, to the extent that it induces cartel firms to devote costly resources to cartel activities.
{"title":"An inspector calls: On the optimality of warning firms about ongoing inspections in antitrust policy","authors":"María C. Avramovich","doi":"10.1016/j.irle.2024.106244","DOIUrl":"10.1016/j.irle.2024.106244","url":null,"abstract":"<div><div>This paper investigates the effects of disclosing information about the likelihood of an inspection on the sustainability of cartels. To this end, I develop a model in which the Antitrust Authority can credibly disclose this type of information before firms make strategic decisions. In this way, the Antitrust Authority can distort the optimal behavior of the cartel firms related to production and cartel activities between inspection periods and non-inspection periods. I show how this can destabilize some cartel agreements, but it can also create productive inefficiencies not considered in standard models of collusion, to the extent that it induces cartel firms to devote costly resources to cartel activities.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"81 ","pages":"Article 106244"},"PeriodicalIF":0.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143180527","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2025-02-03DOI: 10.1016/j.irle.2025.106247
David Lowing , Léa Munich , Kevin Techer
Accurate cost allocation is a challenge for both public service operators and regulatory bodies, given the dual objectives of ensuring essential public service provision and maintaining fair competition. Operators have the obligation to provide essential public services for all individuals, which may incur additional costs. To compensate this, the operators receive state aids, which are determined by an assessment of the net cost associated with these obligations. However, these aids introduce the risk of distorting competition, as operators may employ them to subsidize competitive activities. To avoid this risk, a precise cost allocation method that adequately assess the net cost of these obligations becomes necessary. Such a method must satisfy specific properties that effectively prevent cross-subsidization. In this paper, we propose a method grounded in cooperative game theory that offers a solution for allocating common costs between activities and obligations in public service provision. We adopt a normative approach by introducing a set of desirable axioms that prevent cross-subsidization. We provide two characterizations of our proposed solution on the basis of these axioms. Furthermore, we present an illustration of our method to the allocation of common costs for a public service operator.
{"title":"Allocating the common costs of a public service operator: An axiomatic approach","authors":"David Lowing , Léa Munich , Kevin Techer","doi":"10.1016/j.irle.2025.106247","DOIUrl":"10.1016/j.irle.2025.106247","url":null,"abstract":"<div><div>Accurate cost allocation is a challenge for both public service operators and regulatory bodies, given the dual objectives of ensuring essential public service provision and maintaining fair competition. Operators have the obligation to provide essential public services for all individuals, which may incur additional costs. To compensate this, the operators receive state aids, which are determined by an assessment of the net cost associated with these obligations. However, these aids introduce the risk of distorting competition, as operators may employ them to subsidize competitive activities. To avoid this risk, a precise cost allocation method that adequately assess the net cost of these obligations becomes necessary. Such a method must satisfy specific properties that effectively prevent cross-subsidization. In this paper, we propose a method grounded in cooperative game theory that offers a solution for allocating common costs between activities and obligations in public service provision. We adopt a normative approach by introducing a set of desirable axioms that prevent cross-subsidization. We provide two characterizations of our proposed solution on the basis of these axioms. Furthermore, we present an illustration of our method to the allocation of common costs for a public service operator.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"81 ","pages":"Article 106247"},"PeriodicalIF":0.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143221261","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2024-11-26DOI: 10.1016/j.irle.2024.106235
Leonard Hoeft , Michael Kurschilgen , Wladislaw Mill
Economists model legal compliance as the process of maximizing utility while weighing the consequences from norm violation against other (monetary and non-monetary) considerations. Legal philosophers, on the other hand, believe that the normative side of law is central. Citizens comply because they have an obligation to do so. Legal norms provide exclusionary reasons that prevent weighing up on other issues. We test and compare both models in a controlled online experiment. We conduct a modified dictator game with partially unknown yet ascertainable payoffs, and vary between treatments the presence and content of authoritative norms. Our experimental results show that – in the presence of a norm – participants follow norms without searching for information that they deem important in the absence of a norm. This pattern is independent of the specific content of the norm. Our results are consistent with the legal model of norm compliance.
{"title":"Norms as obligations","authors":"Leonard Hoeft , Michael Kurschilgen , Wladislaw Mill","doi":"10.1016/j.irle.2024.106235","DOIUrl":"10.1016/j.irle.2024.106235","url":null,"abstract":"<div><div>Economists model legal compliance as the process of maximizing utility while weighing the consequences from norm violation against other (monetary and non-monetary) considerations. Legal philosophers, on the other hand, believe that the normative side of law is central. Citizens comply because they have an obligation to do so. Legal norms provide exclusionary reasons that prevent weighing up on other issues. We test and compare both models in a controlled online experiment. We conduct a modified dictator game with partially unknown yet ascertainable payoffs, and vary between treatments the presence and content of authoritative norms. Our experimental results show that – in the presence of a norm – participants follow norms without searching for information that they deem important in the absence of a norm. This pattern is independent of the specific content of the norm. Our results are consistent with the legal model of norm compliance.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"81 ","pages":"Article 106235"},"PeriodicalIF":0.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142720569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-01Epub Date: 2024-07-25DOI: 10.1016/j.irle.2024.106217
Sirui Han , Haitian Lu , Hao Wu
This article examines the relationship between carbon disclosure, equity returns, and investor awareness in the Chinese A-share market. The study uses firm-disclosed and proprietary vendor-estimated carbon emissions data for A-share listed companies and investigates whether the presentation of carbon risks affects the cross-sectional equity returns of Chinese domestically listed firms. The results indicate that main-board listed companies with higher unscaled carbon emissions tend to earn higher equity returns, even after controlling for factors such as size, book-to-market ratio, momentum, and firm characteristics. Moreover, the observed carbon risk premium associated with carbon-emitting companies decreases as investor awareness improves following the launch of policy agendas promoting carbon neutrality in China. These findings support the research hypothesis that investors seek higher returns for equity investments in carbon-emission-intensive companies to compensate for the higher carbon risks associated with such firms. The study also highlights the importance of carbon disclosure, as companies generally disclose their ESG information when they have improved performance in reducing their carbon emissions.
本文探讨了中国 A 股市场碳信息披露、股票收益和投资者意识之间的关系。研究利用公司披露的碳排放数据和专有供应商估算的碳排放数据，考察了碳风险的表述是否会影响中国国内上市公司的横截面股票回报。结果表明，即使在控制了规模、市净率、发展势头和公司特征等因素后，无标度碳排放量较高的主板上市公司也倾向于获得较高的股票回报。此外，在中国推出促进碳中和的政策议程后，随着投资者意识的提高，观察到的与碳排放公司相关的碳风险溢价也会降低。这些发现支持了研究假设，即投资者在碳排放密集型公司的股权投资中寻求更高的回报，以补偿这类公司相关的较高碳风险。该研究还强调了碳信息披露的重要性，因为公司一般会在其碳减排业绩有所改善时披露其 ESG 信息。
{"title":"ESG disclosure, investor awareness, and carbon risk pricing: Evidence from the Chinese market","authors":"Sirui Han , Haitian Lu , Hao Wu","doi":"10.1016/j.irle.2024.106217","DOIUrl":"10.1016/j.irle.2024.106217","url":null,"abstract":"<div><p>This article examines the relationship between carbon disclosure, equity returns, and investor awareness in the Chinese A-share market. The study uses firm-disclosed and proprietary vendor-estimated carbon emissions data for A-share listed companies and investigates whether the presentation of carbon risks affects the cross-sectional equity returns of Chinese domestically listed firms. The results indicate that main-board listed companies with higher unscaled carbon emissions tend to earn higher equity returns, even after controlling for factors such as size, book-to-market ratio, momentum, and firm characteristics. Moreover, the observed carbon risk premium associated with carbon-emitting companies decreases as investor awareness improves following the launch of policy agendas promoting carbon neutrality in China. These findings support the research hypothesis that investors seek higher returns for equity investments in carbon-emission-intensive companies to compensate for the higher carbon risks associated with such firms. The study also highlights the importance of carbon disclosure, as companies generally disclose their ESG information when they have improved performance in reducing their carbon emissions.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"80 ","pages":"Article 106217"},"PeriodicalIF":0.9,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141853770","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-01Epub Date: 2024-10-28DOI: 10.1016/j.irle.2024.106233
Thomas J. Miceli, Kathleen Segerson
The broken-windows theory of crime is based on the idea that aggressive enforcement of petty crimes, like misdemeanors, will have a deterring effect on would-be perpetrators of more serious crimes. This paper develops a model of this theory that depends on three factors: (1) potential offenders make decisions about committing crimes based on their beliefs about the probability of apprehension; (2) those beliefs depend on prior observations or knowledge about the rate of petty crimes; and (3) there is a linkage across criminal categories (minor vs. serious crimes) as a component of actual enforcement policy. Our results show that even if these factors are all present, increased enforcement of low-harm crimes does not necessarily lead to fewer high-harm crimes.
{"title":"The broken-windows theory of crime: A Bayesian approach","authors":"Thomas J. Miceli, Kathleen Segerson","doi":"10.1016/j.irle.2024.106233","DOIUrl":"10.1016/j.irle.2024.106233","url":null,"abstract":"<div><div>The broken-windows theory of crime is based on the idea that aggressive enforcement of petty crimes, like misdemeanors, will have a deterring effect on would-be perpetrators of more serious crimes. This paper develops a model of this theory that depends on three factors: (1) potential offenders make decisions about committing crimes based on their beliefs about the probability of apprehension; (2) those beliefs depend on prior observations or knowledge about the rate of petty crimes; and (3) there is a linkage across criminal categories (minor vs. serious crimes) as a component of actual enforcement policy. Our results show that even if these factors are all present, increased enforcement of low-harm crimes does not necessarily lead to fewer high-harm crimes.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"80 ","pages":"Article 106233"},"PeriodicalIF":0.9,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-01Epub Date: 2024-11-13DOI: 10.1016/j.irle.2024.106234
Carlisle Moody , John R. Lott
In 2021 we wrote a short paper noting that truncating the sample when estimating the effect of right to carry laws on crime could be biased by comparisons to states that already adopted the law, instead of states without the law. In 2023 Bondy et al. criticized our paper but inaccurately described what we did and provided selective and misleading results. More importantly, they completely missed the point of our analysis, namely that applying two-way fixed effects to a truncated sample, say 1991–2018, biases the resulting RTC coefficient by invalidly comparing newly treated states to 11 previously treated states. The bias is so large that even if the true coefficient on the right-to-carry dummy is negative, the estimated coefficient could be positive. These biased results can be corrected by using new DID estimators, that do not make invalid comparisons, and which are robust to time and state heterogeneity. Using these new estimators, we find that RTC laws do not significantly increase violent crime. We find evidence that RTC laws significantly reduce murder and that constitutional carry laws significantly reduce rape.
{"title":"Estimating the effect of concealed carry laws on murder: A response to Bondy, et al.","authors":"Carlisle Moody , John R. Lott","doi":"10.1016/j.irle.2024.106234","DOIUrl":"10.1016/j.irle.2024.106234","url":null,"abstract":"<div><div>In 2021 we wrote a short paper noting that truncating the sample when estimating the effect of right to carry laws on crime could be biased by comparisons to states that already adopted the law, instead of states without the law. In 2023 Bondy et al. criticized our paper but inaccurately described what we did and provided selective and misleading results. More importantly, they completely missed the point of our analysis, namely that applying two-way fixed effects to a truncated sample, say 1991–2018, biases the resulting RTC coefficient by invalidly comparing newly treated states to 11 previously treated states. The bias is so large that even if the true coefficient on the right-to-carry dummy is negative, the estimated coefficient could be positive. These biased results can be corrected by using new DID estimators, that do not make invalid comparisons, and which are robust to time and state heterogeneity. Using these new estimators, we find that RTC laws do not significantly increase violent crime. We find evidence that RTC laws significantly reduce murder and that constitutional carry laws significantly reduce rape.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"80 ","pages":"Article 106234"},"PeriodicalIF":0.9,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142653074","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-01Epub Date: 2024-09-02DOI: 10.1016/j.irle.2024.106228
Steffen Juranek , Håkon Otneim
We use machine learning methods to predict which patents end up in court using the population of US patents granted between 2002 and 2005. We show that patent characteristics have significant predictive power, particularly value indicators and patent-owner characteristics. Furthermore, we analyze the predictive performance concerning the number of observations used to train the model, which patent characteristics to use, and which predictive model to choose. We find that extending the set of patent characteristics has the biggest positive impact on predictive performance. The model choice matters as well. More sophisticated machine learning methods provide additional value relative to a simple logistic regression. This result highlights the existence of non-linearities among and interactions across the predictors. Our results provide practical advice to anyone building patent litigation models, e.g., for litigation insurance or patent management more generally.
{"title":"Predicting patent lawsuits with machine learning","authors":"Steffen Juranek , Håkon Otneim","doi":"10.1016/j.irle.2024.106228","DOIUrl":"10.1016/j.irle.2024.106228","url":null,"abstract":"<div><p>We use machine learning methods to predict which patents end up in court using the population of US patents granted between 2002 and 2005. We show that patent characteristics have significant predictive power, particularly value indicators and patent-owner characteristics. Furthermore, we analyze the predictive performance concerning the number of observations used to train the model, which patent characteristics to use, and which predictive model to choose. We find that extending the set of patent characteristics has the biggest positive impact on predictive performance. The model choice matters as well. More sophisticated machine learning methods provide additional value relative to a simple logistic regression. This result highlights the existence of non-linearities among and interactions across the predictors. Our results provide practical advice to anyone building patent litigation models, e.g., for litigation insurance or patent management more generally.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"80 ","pages":"Article 106228"},"PeriodicalIF":0.9,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818824000486/pdfft?md5=4ba76bd8d870447814bf120c9c534c7b&pid=1-s2.0-S0144818824000486-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142150878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-01Epub Date: 2024-09-12DOI: 10.1016/j.irle.2024.106231
Tim Friehe , Cat Lam Pham , Simon Xemaire
This paper analyzes how the plaintiff selects her lawyer based on lawyers’ confidence in their trial-effort productivity. The plaintiff’s lawyer works on a contingent fee and makes litigation decisions on the plaintiff’s behalf. When the lawyer’s preferences are decisive at both the settlement and the trial stage, the plaintiff must anticipate that a more confident lawyer evaluates settlement compared to trial differently and implies different equilibrium trial effort levels. When the lawyer implements the plaintiff’s ideal settlement demand, only the influence of the confidence level on trial effort levels is relevant. In both cases, the plaintiff prefers an overconfident lawyer but would be harmed by excessive overconfidence. In many circumstances, the optimal confidence level maximizes the plaintiff’s trial payoff. However, when the lawyer’s preferences are decisive at both the settlement and trial stage, the plaintiff may choose an even more confident lawyer to raise the settlement level her lawyer demands from the defendant.
{"title":"On the strategic choice of overconfident lawyers","authors":"Tim Friehe , Cat Lam Pham , Simon Xemaire","doi":"10.1016/j.irle.2024.106231","DOIUrl":"10.1016/j.irle.2024.106231","url":null,"abstract":"<div><p>This paper analyzes how the plaintiff selects her lawyer based on lawyers’ confidence in their trial-effort productivity. The plaintiff’s lawyer works on a contingent fee and makes litigation decisions on the plaintiff’s behalf. When the lawyer’s preferences are decisive at both the settlement and the trial stage, the plaintiff must anticipate that a more confident lawyer evaluates settlement compared to trial differently and implies different equilibrium trial effort levels. When the lawyer implements the plaintiff’s ideal settlement demand, only the influence of the confidence level on trial effort levels is relevant. In both cases, the plaintiff prefers an <em>overconfident</em> lawyer but would be harmed by <em>excessive</em> overconfidence. In many circumstances, the optimal confidence level maximizes the plaintiff’s trial payoff. However, when the lawyer’s preferences are decisive at both the settlement and trial stage, the plaintiff may choose an even more confident lawyer to raise the settlement level her lawyer demands from the defendant.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"80 ","pages":"Article 106231"},"PeriodicalIF":0.9,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818824000516/pdfft?md5=95492fe750bb30a2275d19a70cc39bc7&pid=1-s2.0-S0144818824000516-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142228626","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号