New and Improved: Is Antitrust Too Complicated for Generalist Judges

Josh Wright —  16 February 2009

Co-author Michael R. Baye (of the Kelley School of Business at Indiana University and formerly Director of the Bureau of Economics at the Federal Trade Commission) and I have posted a new and improved version of our paper, Is Antitrust Too Complicated For Generalist Judges: The Impact of Economic Complexity and Judicial Training on Appeals, to SSRN.

We undertook to empirically examine these issues directly by evaluating the relationship between economic complexity and appeals in district court decisions reaching substantive antitrust matters from 1996-2006.  We also have some unique data that we’ve collected on which federal judges attended the George Mason University Law and Economics Center economics training and examine how that training impacts the appeal rate in economically simple and complex cases.  We envision the paper as addressing two related research questions: (1) what is the impact of economic complexity on the quality of judicial-decision making in antitrust? and (2) does basic economic training (at the LEC) improve judicial decision-making in antitrust cases?

The new and improved version features some additional data we collected in order to better control for the possibility that the selection of “better” judges into LEC training or judicial antitrust experience levels explain our results, some additional robustness checks, and some interesting summary statistics and charts that readers might be interested in taking a look at.  If you’ve downloaded the paper before, do it again. I think the new version is worth a read (and of course, please feel free to leave comments here or email me).   Here’s the abstract:

Modern antitrust litigation sometimes involves complex expert economic and econometric analysis. While this boom in the demand for economic analysis and expert testimony has clearly improved the welfare of economists-and schools offering basic economic training to judges-the law and economics literature is silent on the empirical effects of economic complexity or judges’ economic training on decision-making in antitrust litigation. We use a unique data set on antitrust litigation in federal district and administrative 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, the appellate circuit in which the case is litigated, level of judicial experience with antitrust claims, judicial quality, 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 initial court got the economics wrong, is that there is support for the hypothesis that some antitrust cases are too complicated for generalist judges. 

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