Rent seeking and bias in appeals systems

Tim Friehe, Ansgar Wohlschlegel

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    Abstract

    We analyze a litigation contest in which plaintiff and defendant seek to win in trial court, and the losing litigant may appeal. In our setup, the appeals court's judgment depends on the trial court's judgment, the merits of the litigants' arguments, and their efforts in the appeals stage. We find that the possibility of appeal increases the favorite's probability of winning as compared to that in a single-stage system, as the favorite has higher effort incentives in the first-instance authority than the underdog. Moreover, we show that the possibility of appeal may increase total rent-seeking efforts and make the case less likely to be tried, or that it surprisingly may have the opposite effects, and how the direction of these effects depends on the model parameters.
    Original languageEnglish
    Pages (from-to)117-157
    Number of pages41
    JournalThe Journal of Legal Studies
    Volume48
    Issue number1
    DOIs
    Publication statusPublished - 1 Jan 2019

    Keywords

    • Appeals
    • Litigation
    • Justice
    • Contest
    • Effort

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