Economics literacy and Judges

Just a pointer to a new paper by Michael Baye and Josh Wright who analyse whether economic complexity can drive appeals in antitrust cases.

We use a unique data set on antitrust litigation in district courts during 1996-2006 to examine whether economic complexity impacts decisions in antitrust cases, and thereby provide a novel test of the frequently asserted hypothesis that antitrust analysis has become too complex for generalist judges. We also examine the impact of one institutional response to economic complexity: basic economic training by judges. We find that decisions involving the evaluation of complex economic evidence are significantly more likely to be appealed, and decisions of judges trained in basic economics are significantly less likely to be appealed than are decisions by their untrained counterparts. Our results are robust to a variety of controls, including the type of case, circuit, and the political party of the judge. Our tentative conclusion, based on a revealed preference argument that views a party’s appeal decision as an indication that the district court got the economics wrong, is that there is support for the hypothesis that some antitrust cases are too complicated for generalist judges.

The conclusion seems to be that some economics training can reduce the likelihood of appeals. What is harder to tell is what mechanism might be driving that. For instance, judges know who is the more economically literate and so an appeal court might defer to the decisions to a more economically literate lower court judge. If that is the case, the incentive to appeal is lower. I’d have to delve into the paper more the see what the impact of all this is on successful appeals. But it is a holiday today and so I’ll leave that for another time.

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