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Divorce and the Excess Burden of Lawyers

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  • Halla, Martin

    (Vienna University of Economics and Business)

Abstract

We present a model where divorcing spouses can choose to hire lawyers in their divorce process. Spouses encounter incentives as in the classical prisoners’ dilemma: Despite the zero sum nature of the game and the lawyers’ fees, each spouse has an incentive to hire a lawyer. We propose a simple institutional setting allowing for joint lawyers in order to overcome this socially inefficient situation. This model is estimated and tested with rich micro-data from court records. Employing a multiple treatment matching procedure we estimate the causal effect of lawyers on the division of matrimonial property, on the length of the divorce process and on the quality of the divorce settlement.

Suggested Citation

  • Halla, Martin, 2007. "Divorce and the Excess Burden of Lawyers," IZA Discussion Papers 2962, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2962
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    1. Orley Ashenfelter & David Bloom, 1990. "Lawyers as Agents of the Devil in a Prisoner's Dilemma Game," Working Papers 650, Princeton University, Department of Economics, Industrial Relations Section..
    2. Orley Ashenfelter & Gordon B. Dahl, 2012. "Bargaining and the Role of Expert Agents: An Empirical Study of Final-Offer Arbitration," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 116-132, February.
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    15. Casella, Alessandra, 1996. "On market integration and the development of institutions: The case of international commercial arbitration," European Economic Review, Elsevier, vol. 40(1), pages 155-186, January.
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    Cited by:

    1. Martin Halla & Johann Scharler, 2012. "Marriage, Divorce, and Interstate Risk Sharing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 55-78, March.
    2. Magdalena Flatscher-Thöni & Andrea M. Leiter & Hannes Winner, 2019. "Are Pain and Suffering Awards (Un-)Predictable? Evidence from Germany," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 199-219, September.
    3. Henri Fraisse, 2010. "Labour Disputes and the Game of Legal Representation," CESifo Working Paper Series 3084, CESifo.

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    More about this item

    Keywords

    litigation; lawyers; divorce settlements; dispute resolution; family law; multiple treatment matching;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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