BID Brown Bag Seminar: Line Deviators Up and Punish the First

Research Cluster

Speaker:Miguel Fonseca, University of Exeter
Date: Tuesday 7 February 2017
Time: 12.30 - 13.30
Location: Marchant Syndicate Room A, Building One

Further details

We propose a procedural rule to improve on sequentially servicing civil cases for breach of contract. The judiciary orders such cases filed in a given time period according to a preannounced list. This list ranks all entities that may enter contracts by some observable identifying characteristic, such as taxpayer numbers. The judiciary commits to enforcing the contract of the first entity on that ordered list that files a civil case. In theory, this rule achieves efficiency in a population of investment games. Results from laboratory experiments suggest that it improves compliance and reduces both strategic uncertainty and payoff inequality.