This paper analyzes reputational bargaining between two parties who can strategically send an ultimatum to resolve the conflict by law. Each party is either a justified player who is inflexible about demand and resolves the conflict by law whenever possible, or an unjustified player who is...

We describe and analyze a contractual environment that allows a role for an active court. The model we analyze is the same as in Anderlini, Felli, and Postlewaite (2006). An active court can improve on the outcome that the parties would achieve without it. The institutional role of the court is...

How does opinion polarization over matters of moral conviction affect the legislative outcome of parliamentary institutions? Analysis reveals that in the relatively common case, in which a party's voting power is positively correlated with the public support of the convictions it represents, if...

In a Case Law regime Courts have more flexibility than in a Statute Law regime. Since Statutes are inevitably incomplete, this confers an advantage to the Statute Law regime over the Case Law one. However, all Courts rule ex-post, after most economic decisions are already taken. Therefore, the...

It is found that the “Theory of Moves” is adequate in a Cold War scenario, with functionally equal participants, such as the Cuban Missile Crisis. The destabilization of normal incentive systems, under power and information asymmetry, is what prevents an equilibrium from being reached, as...

All Courts rule ex-post, after most economic decisions are sunk. This can generate a time-inconsistency problem. From an ex-ante perspective, Courts will have the ex-post temptation to be excessively lenient. This observation is at the root of the rule of precedent, known as stare decisis. <P>...</p>

We study a contracting model with unforeseen contingencies in which the court is an active player. Ex-ante, the contracting parties cannot include the risky unforeseen contingencies in the contract they draw up. Ex-post the court observes whether an unforeseen contingency occurred, and decides...

In a Case Law regime Courts have more flexibility than in a Statute Law regime. Since Statutes are inevitably incomplete, this confers an advantage to the Case Law regime over the Statute Law one. However, all Courts rule ex-post, after most economic decisions are already taken. Therefore, the...

We describe and analyze a contractual environment that allows a role for an active court.The model we analyze is the same as in Anderlini, Felli, and Postlewaite (2006). Anactive court can improve on the outcome that the parties would achieve without it. Theinstitutional role of the court is to...

To forecast decisions in conflict situations, experts are often advised to figuratively stand in the other person’s shoes. We refer to this as “role thinking” because, in practice, the advice is to think about how other protagonists will view the situation in order to predict their...