The Lack of Transparency in Economics - Dissertation Example

Download file to see previous pages Transparency in this regard is superficial as ordinary members of the public rarely spend time in courts observing trials unless they are parties to a case and thus are wholly unaware of the rulings, the contents of the rulings, the rationale, ratio decidendi, and how those rulings compare to previous rulings. Moreover, ordinary members of the public are also generally unaware of the court hierarchal structure and will not know whether or not a ruling by one court is binding on another court or whether or not a ruling in one court is invalid because it failed to follow a ruling by a higher court. In this regard, transparency only benefits experts and members of the public must pay for expert advice and knowledge. Complicating matters, the cost of this advice is far from transparent since it varies from one lawyer to another and changes according to the special circumstances and facts of a particular case. It is against this background that this research study applies game theory’s coordination model and Nash equilibrium model which theoretically at least, helps to shed light on the factors that influence actors in deciding to litigate.
Dari-Mattiacci and Deffains argue that there is a “natural balance between” uncertainty levels controlled by litigation and the rate of litigation which is in turn generated by transparency. To demonstrate this balance, Dari-Mattiacci and Deffains created a model that illustrates how litigation rates and uncertainty affect “litigation fees/subsidies and legislation” and using this model, the authors conduct a cost-benefit analysis of the “legislative and the judicial process of lawmaking.” Informed by game theory, this paper uses the model created by Mattiacci and Deffains in analysing the incentives created by transparency in the cost of justice. The results of a survey conducted in Europe involving 1080 respondents are used to confirm the author’s contention that potential litigants are concerned with outcomes and the cost of litigation. In other words, transparency in the cost of justice can result in more litigation if the costs of justice in terms of legal fees and related expenses are low but can result in less litigation if the costs of justice are high or disproportionate to the award contemplated by the dispute. It is therefore concluded that transparency and its twin partner certainty/uncertainty inform the potential litigant’s decision, but only via attorneys who can understand the information generated by precedents and this information is available at uncertain costs. Based on information relative to the outcome, the law, strategies/intentions of other actors, and the socio-economic cost involved in obtaining relevant information and the desired outcome, potential litigants will decide on one of three things: accept the consequences of the legal dispute and do nothing; settle the matter privately or rely on formal adjudication to resolve the dispute. ...Download file to see next pages Read More