In this article, we show that the presence of the judiciary in the background of labour relationships is not neutral within these relations: its potential intervention in case of an ex-post layoff and conflict over the severance payment can promote ex-ante efficient specific investment...

This paper presents a model of litigation in the context of a labor contract. The main objective of our analysis is to determine whether and under which conditions it is efficient that the judiciary arbiters a labor conflict and how the judge's decision should be made in order to be optimal. We...

This paper presents a model of litigation in the context of a labor contract. The main objective of our analysis is to determine whether and under which conditions it is efficient that the judiciary arbiters a labor conflict and how the judge's decision should be made in order to be optimal. We...