This paper studies the effects of lawyers' career concerns on litigation in a model with two lawyers opposing each other in a case. The outcome of the trial depends on the lawyers' talents and choices of effort, and therefore is informative about the lawyers' talents. Career concerns imply that the lawyers' payoff functions are increasing in the market's inference about their talent. As a consequence, they provide an implicit incentive for lawyers to exert higher levels of effort in court, and create strategic interactions between the two. In particular, career concerns create an equilibrium effort trap, which implies larger trial costs and is consistent with empirical findings on lawyers' hours of work. In addition, these results have implications for settlement. First, larger trial costs increase the range for pretrial bargaining. Second, I find that the lawyer with stronger career concerns may end up obtaining a more beneficial settlement agreement.
Forthcoming at the European Economic Review
Abstract:
A standard assumption in the economics of law enforcement is that the probability of a violator being punished depends only on the resources devoted to enforcement. However, it is often true that the productivity of enforcement resources decreases with the number of violators. In this paper, an individual who violates the law provides a positive externality for other offenders because the probability of being punished decreases with the number of individuals violating the law. This externality explains the existence of correlation between individuals' decisions to break a law. The model evaluates the implications when determining the socially optimal enforcement expenditure, focusing specifically on the case of neighborhood crime. In particular, using a parametrized functional form, I show that neighborhood externalities will enhance or impede enforcement, depending on the crime rate.
(Working paper from March 2008 available here)
"Overworking to win the case: representing cases in court and young lawyers' hours of work"
Abstract:
Using survey data from the "After the JD" study, I test whether being involved in court cases induces young lawyers to work more hours. Lawyers involved in court cases might have incentives to work more hours because, considering that the trial outcome is an important source of information about lawyers' skills, winning or losing a case might have a considerable impact on young lawyers' careers. Once controlling for salary, educational background and some other demographic variables, I estimate the average treatment effect between lawyers that are directly involved in court cases (treatment group) and the rest of lawyers working in law firms (control group). According to the preliminary results, I find that young lawyers who usually appear in court as first or second chair on a case work nearly five hours more per week than other young lawyers also working in law firms. Moreover, there is also a positive and significant difference between these two groups in the hours they work above what is expected from them.
Revise and resubmit
Abstract:
Which decision rules are the most efficient? Which are the best in terms of maximin, or maximax? We study these questions for the case of a group of individuals faced with a choice from a set of alternatives. First, we show that the set of optimal decision rules is well-defined, particularly simple and well-known: the class of scoring rules. Second, we provide the optimal decision rules for the three different ideals of justice under consideration: utilitarianism (efficiency), maximin, and maximax. We show that plurality, arguably the most widely used voting system, is optimal in terms of maximax, while the best way to achieve maximin is by means of negative voting, and the optimal utilitarian decision rule depends on the culture of the society. We then provide the mapping between cultures and optimal decision rules.
