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Decision Rules in a Judicial Hierarchy

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  • Charles M. Cameron
  • Lewis A. Kornhauser

Abstract

This paper extends the analysis of the structure of judicial hierarchies to environments in which litigants may have asymmetric information about the merits of the case. We identify equilibria in which the error rate is zero. In each equilibrium, at least one of the inferior courts does not decide cases on the basis of its prior beliefs. Rather, in the absence of an informative signal, an inferior court decides against the informed litigant in order to exploit that litigant's knowledge.

Suggested Citation

  • Charles M. Cameron & Lewis A. Kornhauser, 2005. "Decision Rules in a Judicial Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 264-292, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200506)161:2_264:driajh_2.0.tx_2-v
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    References listed on IDEAS

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    1. A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 562-570, Winter.
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    5. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    6. Kornhauser, Lewis A & Revesz, Richard L, 1994. "Multidefendant Settlements: The Impact of Joint and Several Liability," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 41-76, January.
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    Cited by:

    1. Bui, Dien Giau & Chen, Yan-Shing & Hasan, Iftekhar & Lin, Chih-Yung, 2018. "Can lenders discern managerial ability from luck? Evidence from bank loan contracts," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 187-201.
    2. Yves Oytana, 2014. "The Judicial Expert in a Two-Tier Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 537-570, September.
    3. Tom S. Clark & Aaron B. Strauss, 2010. "The Implications of High Court Docket Control for Resource Allocation and Legal Efficiency," Journal of Theoretical Politics, , vol. 22(2), pages 247-268, April.
    4. Steven Shavell, 2010. "On the Design of the Appeals Process: The Optimal Use of Discretionary Review versus Direct Appeal," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 63-108, January.
    5. Christoph Engel & Urs Schweizer, 2005. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 191-192, June.

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    More about this item

    JEL classification:

    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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