2006-06-02Buch DOI: 10.18452/3823
Trust in the shadow of the courts if judges are no better
Can a court system conceivably control opportunistic behavior if judges are selected from the same population as ordinary citizens and thus are no better than "the rest of us"? This paper provides a new and, as we claim, quite profound "rational choice" answer to that unsolved riddle. Adopting an indirect evolutionary approach with endogenous preference formation the complex interactions between "moral" intrinsic motivation to behave non-opportunistically and extrinsic "formal" controls of opportunism are analysed. Under the assumption that judges are no better than ordinary citizens it is shown that introducing a court system can nevertheless prevent that the more trustworthy are driven out. It cannot be excluded, though, that courts may themselves crowd out trustworthiness under certain circumstances.
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Is Part Of Series: Sonderforschungsbereich 373: Quantification and Simulation of Economic Processes - 44, SFB 373 Papers, ISSN:1436-1086