摘要：Judges become ambitious decision makers when they face appellate review. This paperapplies a contract theoretic perspective to the behavior of self-interested trial judges in a twolevelcourt system and analyzes the consequences for contracting in “the shadow of” thecourt. Confronted with the factual ambiguity of an assigned case, rational judges pursue an(privately) optimal strategy to conclude the dispute and tip the scales of the trial outcome. Weshow that even if judges generally dislike errors and have no personal preference for aspecific party, these effects of judicial agency manipulate the implemented court accuracy anddegrade the contract outcome. Our implications put into perspective the traditional function ofappellate courts to foster the accuracy of enforcement and identify the need for a complexmeasurement of judicial performance. The model also reveals that a judicial tendency toconclude lawsuits in the conciliatory hearing may overly strain contract output
关键词：Court error; judicial behavior; reputation; contract theory
