TILEC Work In Progress: Madina Kurmangaliyeva
10:45-11:45, M 1003
Victim-Defendant Settlements under Asymmetric Bargaining Positions: The Role of Wealth and Connections in Access to Justice
(with Anastasia Antsygina)
Both civil and criminal legal practices deal with victim-defendant settlements. Understanding how the power imbalance affects the negotiation process is crucial for the optimal design of the justice system and access to it. We develop a theoretical model of victim-defendant settlements in the context of criminal justice where the victim (the defendant) must exert costly effort for the case to end up with a conviction (acquittal). Before the game starts, the defendant can settle with the plaintiff by making her a take-it-or-leave-it offer. Russia allows victim-fefendant settlements for unintentional and non-severe crimes. Using Russian data on criminal traffic offenses with pedestrians as victims for 2013-2014, we structurally estimate the model. In the data we observe the socio-economic and employment status of defendants and victims, as well as education and car driven by defendants. Our results show that policemen, when they are involved as defendants, have approximately twice lower cost of effort than a comparable wealth group. We attribute their lower costs to non-monetary resources thanks to their connections or/and the knowledge of the criminal justice system. As a result, policemen manage to settle more often than a comparable wealth group of defendants, which indicates that the policemen's victims were ready to accept lower settlement prices. The results raise fairness concerns. Since both monetary and non-monetary resources increases the chances of defendant’s success in the contest stage, an increase in the defendant's wealth also decrease the settlement price, all other things being equal. However, the access to justice for victims of traffic offenses is not equal with or without settlements. Actually, banning the settlements can even worsen the access. The paper contributes to the empirical literature on settlement process.