This study's findings are of significant importance to the Italian judicial system, which is grappling with prolonged proceedings, particularly in civil courts. The research focuses on key factors that influence a judge's duration of legal disputes, using panel data from an Italian court for civil cases filed between 2015 and 2019. A multivariate linear model with high dimensional fixed effects is adopted. The evidence underscores the influence of the judge's right working approach, their commitment, the procedure's complexity, and the degrees of judgment on the trial's length. The policy recommendations, aimed at enhancing the overall quality of the existing judicial system, include minimizing task juggling to resolve disputes, increasing the number of scheduled hearings per week, and effectively managing complexity to ensure accurate judgments.
This Special Issue marks the tenth anniversary of the "economic analysis of litigation" academic journey that began in 2014 in Catania with an international workshop. This event has since become an annual meeting point, held in various European cities and online during the pandemic. Over the past decade the field has grown substantially and the contributions collected in this issue reflect the vitality and the maturity of this research agenda. At the same time they highlight the continuing importance of understanding how litigation and judicial institutions shape economic outcomes.
This paper examines the relationship between attorneys' representation of litigants and mediation outcomes in Italy. Based on exclusive data from a selection of Italian cities during the 2011-2017 period, we investigate whether attorneys' involvement in a case is related to the parties' probability to enter into a mediation agreement. We are particularly interested in Italian mediation because of its mandatory nature for selected categories of cases. Findings supply evidence on the puzzling role of lawyers in mediation. While plaintiffs' legal representation turns out to be positively related to an increase in the likelihood of a mediation success, the sign is, unexpectedly but robustly, opposite in the case of defendants. Similar results seem to suggest that in the case of attorneys' presence, the outcome of mediation mainly depends on their incentives and clients' motivation within the process of dispute resolution. Beyond the scholarly interest, such results have also interesting policy implications.
This article offers a comparative economic analysis of remuneration models for bankruptcy administrators, examining the extent to which current practices across jurisdictions align with the goals of efficiency and creditor protection. Drawing on law and (micro)economics methodology, the paper models two simplified systems of administrator compensation: one centralized, where remuneration is fixed and largely uncorrelated with outcomes, and one decentralized, where creditors direct litigation and administrator involvement. While the Swiss legal framework is used as an illustrative example, the models and findings are applicable to a broad range of legal systems that face similar structural and incentive-based challenges. The analysis suggests that decentralized approaches may offer greater economic efficiency by discouraging opportunistic behavior and better aligning administrator incentives with creditor outcomes. A hybrid system is proposed, integrating performance-based elements to enhance estate management.
This paper develops a contract-theoretic model of trade-based money laundering (TBML) in which misinvoicing emerges as an optimal response to non-scalable verification. Firms choose not only the magnitude and direction of misinvoicing, but also the complexity of trade contracts and the coherence of multi-document shipping bundles in order to minimise expected enforcement losses. Verification institutions face informational and behavioural constraints that become increasingly fragile as documentation complexity rises. The model shows that higher penalties or audit intensity do not necessarily deter TBML and may instead induce greater opacity and document engineering. Plausibility constraints, document unbundling, and verification design play a more central role than penalty escalation. The analysis explains persistent empirical detection gaps and the evolution of sophisticated TBML typologies observed in the literature. The paper reframes TBML as a problem of endogenous contract design under verification frictions, with implications for enforcement strategy, welfare, and future empirical identification.
This paper develops a theory of how social trust shapes the relationship between overinclusive formal rules, social norms, and legal enforcement. I first present a static model in which individuals face a rule that forbids an action that is sometimes harmful but often harmless. Individuals differ in prosociality, the share of civic types is interpreted as social trust, and a rule-following norm imposes a violation cost that declines with trust. Higher trust weakens this norm and induces civic types to violate the rule in harmless situations while continuing to obey when violations would be harmful, whereas opportunistic types violate in all states. As a result, higher trust can generate more harmless violations, fewer harmful violations, and higher welfare. I then embed this behavioral block in a policy environment where a government chooses enforcement intensity. Enforcement strengthens the norm but is costly. In equilibrium, low-trust societies select a rigid regime with strict enforcement and full compliance. High-trust societies instead select a flexible regime with low average enforcement intensity. In this regime, officials exercise legal discretion and selectively enforce overinclusive rules mainly in harmful cases, while typically tolerating harmless violations, which generates a stable pattern of tolerated noncompliance in harmless situations. Finally, an overlapping-generations extension endogenizes trust through cultural transmission and yields multiple steady states that differ in trust, enforcement, norms, and the prevalence of harmless versus harmful violations.
In games of asymmetric information, it can be difficult for subjects to understand the true position of their opponents. Theoretically, they should be able to take the information they are given and reason through their opponent's options, but in practice this could be quite demanding. A potential solution to this problem is to allow subjects to switch roles, thereby gaining an understanding of the other side of the table. In this paper, I look at the effect of role switching on the learning process in a simple signaling game of pretrial bargaining. My findings are mixed: role switching appears to help Subjects reduce some kinds of mistakes, but it also exacerbates other mistakes.
This paper analyzes the impact of reverse contingency fees - compared to hourly fees - on the likelihood of frivolous lawsuit, the probability of pre-trial settlement, and the total litigation costs, considering an asymmetric information game of litigation. Under reverse contingency fees, the defendant's lawyer gets a share of the amount his client saved in litigation, which is the difference between the plaintiff's claim and the final settlement or judgement. In our set-up, ignoring whether the plaintiff suffered harm or not, the defendant prefers to settle if the probability of dealing with a truly injured plaintiff is sufficiently high. Reverse contingency fees raise the threshold probability, making settlement less desirable for the defendant and hence lawsuit less attractive for an uninjured plaintiff, which reduces total expenditures, as compared to hourly fees. Reverse contingent fees may then be seen as an additional instrument to deter frivolous litigation, beyond the implementation of sanctions or the use of the English fee-shifting rule.
In addition to campaign promises and clientelistic practices via particularized (non-programmatic) benefits to boost their chances of winning an election, politicians may also seek the endorsement of influential members of the society in exchange for benefits provided before the election or conditional on electoral success. As a starting point to analyze such exchanges, we construct a simple full-information contractual bilateral exchange game where particularized benefits are exchanged for an influencer's costly action and derive conditions under which different forms of payment would be used. Using a framed laboratory experiment that exogenously varies the politician's gain from winning and the influencer's impact on the chance of success, we find that the number of exchanges is significantly lower than predicted by a model of purely self-interested behavior. When exchanges do occur, they overwhelmingly take place with winning-conditional payments. Our results are consistent with a model of inequity aversion, whereby influencers' fairness concerns constrain influence buying, particularly when candidates' gains from winning are high. We argue that knowledge of the politician's potential rents, combined with other-regarding preferences among influencers, may limit influence buying.
This pilot study explores the feasibility of using Quadratic Voting for Survey Research (QVSR) as an alternative to the traditional Likert scale in a municipal decision-making context. By observing decision-makers' behavior and voting outcomes, the study provides descriptive evidence on how these two survey methodologies perform in practice. While standard democratic processes often overlook the intensity of citizen preferences, QVSR allows individuals to express preference strength using a limited credit system. In contrast, the Likert scale, though widely used, may be susceptible to response biases and assumptions about sincerity. Previous studies have demonstrated the theoretical and experimental promise of QVSR; this pilot extends that work by assessing its feasibility and practical implementation in a real-world policy environment. Conducted in the Gabba Ward municipality in Brisbane, Australia, the study randomly assigned citizens and policymakers to QVSR or Likert conditions and describes patterns in the alignment between citizen responses and councilor voting. The results are exploratory and intended to inform future, larger-scale evaluations of QVSR's potential to support more nuanced and representative forms of democratic engagement.
This study examines optimal punishment schemes in crime economics by focusing on offender impulsiveness. Although prior studies have supported the Proportionality Rule, where penalties increase with the severity of crimes in contexts involving multiple criminal opportunities, these models typically assume fully rational offenders. However, recent findings in criminology and behavioral economics suggest that many crimes are impulsive. This study theoretically demonstrates that, within a framework that simultaneously considers multiple offenses and determines the sentence for each, when the penalty differentials across offenses are tightly constrained for normative and institutional reasons, and offender impulsiveness is high, the Proportionality Rule fails to deter serious crimes and is not the optimal punishment rule. As an alternative, this paper proposes a Reduced Penalty Rule that imposes lighter sanctions on serious crimes and demonstrates that it can minimize social costs under specific conditions. This analysis provides theoretical guidance for policy design under law-enforcement resource constraints.
This paper applies meta-analysis of school quality capitalization estimates reported in the literature to examine the relationship between differences across US state approaches to protecting property rights and price discovery in housing markets. After controlling for possibly confounding influences from the housing supply elasticity and regional effects, the analysis shows that restricting local government powers of eminent domain for redevelopment is associated with house prices doing a better job conveying information about school quality differences across neighborhoods. While the property rights variables used here are narrowly defined, following previous literature, we argue they likely indicate the state's broader approach to protecting private property rights in general.
This paper casts a critical eye on the role of efficiencies in the 2023 Merger Guidelines. This analysis addresses mergers that reduce production costs, those that reduce transaction costs, and those that improve product quality. In addition, this paper examines the antitrust treatment of mergers that change the market structure and thereby improve both consumer and social welfare. These include mergers of successive monopolists, mergers of complementary good producers, and mergers that create bilateral monopoly.
This experimental paper provides evidence on the incidence of different third-party punishment institutions in the context of a game designed to represent simplified versions of specific, real-life situations. We begin with a benchmark scenario (which we will call "Baseline"), that involves the possibility of altruistic third-party punishment after playing a taking game. The "vertical control" treatment adds a second possible punisher who can confirm or overturn the initial decision. The "giving reasons" treatment requires the third party to provide reasons to motivate her/his choice. A fourth treatment combines both instruments. Thus, we manipulate our interest variables ("vertical control" and "giving reasons") both one at a time and, eventually, in a combined format. The main result is that both instruments have a significant positive impact on the incidence of punishment. In contrast, the hybrid scenario does not further increase the frequency of punishment, seemingly due to a "mis-use" of the "giving reasons" requirement by arguing vis-& agrave;-vis the second instance to uphold the first-instance, non-punishment decision.
Experiments on social norm interventions suggest that public dissemination of normative information, which creates common knowledge on a social norm, increases conformity to the social norm more effectively than privately disseminated information, regardless of other factors affecting norm conformity, such as group identity and heterogeneous endowments. We present an experimental test of the effect that the channel of dissemination - public versus private - has on norm conformity at different levels of group identity in a public-goods setting with heterogeneously endowed actors. Participants receive a normative message about the behavior that participants of a previous experiment identified as the "fairest." We vary between strong and weak group identity, and public and private information, and record participants' compliance with the norm. Our results suggest that the effect of public normative information depends on the salience of group identity and the initial endowment of individuals. At best, it has no effect on norm conformity. However, in the heterogeneous setting, it reduces norm conformity among those with lower initial endowments. This poses challenges for eliciting a behavioral change using normative information since providing public information may backfire.
Our paper experimentally tests whether 'soft regulatory devices' that rely on advisor identifiability and reciprocity are able to reduce misconduct by financial advisors. We also test whether advisor ability is negatively related to misconduct. We indeed find that low ability advisors are more likely to engage in misconduct in all treatments including the Baseline. Interestingly, a subset of advisors strategically exploits the identifiability mechanism in order to 'game the system', which undermines the effectiveness of the treatment. Furthermore, we find that reciprocity affects advisors heterogeneously, which causes a group of advisors to increase their misconduct and leads to a significant loss in efficiency in comparison to the Baseline treatment. Additionally, we discuss how low ability advisors have different incentives within each treatment compared to high ability advisors. Our analysis reveals substantial disparities in advisor misconduct across various contexts as interventions influence misconduct in a nuanced manner. Finally, we argue for the use of segmented policy approaches in order to respond to complex market environments involving heterogeneous advisors.
To align private and public interests in social dilemmas, formal regulations have been developed providing enforcement mechanisms to promote cooperation and decrease free riding. Although formal rules sanctioning free riders and rewarding cooperators work in some cases, they are costly to implement. In addition, unless individuals' behavior is observed and external monitoring is high, these legally binding rules are not effective. In a 2 x 2 lab experimental design, this paper investigates whether a proverb reflecting an injunctive norm of cooperation can foster voluntarily cooperative behavior in a Voluntary Contribution Mechanism (VCM) with low monitoring and no punishment mechanisms. The utilized proverb is found to increase contribution. In addition, the findings show no significant difference between the proverb's effect and the effect of a non-proverbial injunctive intervention. Moreover, social type is not found to have a moderating effect as there is no significant difference between the responses of prosocials and proselfs to the two injunctive interventions. The results of this paper imply that cultural proverbs could be used by policy makers as a soft low-cost intervention in social marketing campaigns.
The Islamic inheritance law puts women at a distributive disadvantage leading to gender inequality in wealth accumulation. Religiosity and patriarchy are often blamed for the persistence of gender inequality in Muslim-majority countries. Employing an online vignette experiment, we examine whether religious and pro-male preferences reinforce gender inequality in inheritance in Egypt. We find that religious individuals prefer to abide by the inheritance law and its distributive inequality. We also find that individuals with pro-male cultural beliefs prefer to avoid the inheritance law only selectively to protect the male distributive advantage. Put together, we find that both religiosity and pro-male cultural beliefs are impediments to achieving gender equality in inheritance in Egypt.
