Working Paper: NBER ID: w4447
Authors: Orley Ashenfelter; David Bloom
Abstract: The goal of this paper is to explore the possibility that the costs and benefits of legal representation are structured so that each individual party seeks legal representation in the hope of exploiting the other party, while knowing full well that failing to do so will open up the possibility .of being exploited. The first part of the paper shows how the structure of the incentives faced by the parties may be estimated, and the second describes the results of empirical tests in several different settings. The empirical results strongly suggest that the parties do face "prisoner's dilemma" incentives, although no attempt is made to determine whether the parties respond to these interviews.
Keywords: legal representation; prisoners dilemma; dispute resolution
JEL Codes: J51; K41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structure of incentives (M52) | noncooperative behavior (C72) |
| noncooperative behavior (C72) | social inefficiency (D61) |
| structure of incentives (M52) | legal representation (K41) |
| legal representation (K41) | social inefficiency (D61) |
| legal representation (K41) | unnecessary legal costs (K41) |
| incentives for legal representation (K41) | inefficiencies in dispute resolution (K41) |