Working Paper, Department of Economics, Johannes Kepler University of Linz 0713
We present a model where divorcing spouses can choose to hire lawyers in their divorce process. Spouses encounter incentives as in the classical prisoners dilemma: Despite the zero sum nature of the game and the lawyers fees, each spouse has an incentive to hire a lawyer. We propose a simple institutional setting allowing for joint lawyers in order to overcome this socially inefficient situation. This model is estimated and tested with rich micro-data from court records. Employing a multiple treatment matching procedure we estimate the causal effect of lawyers on the division of matrimonial property, on the length of the divorce process and on the quality of the divorce settlement.
litigation lawyers divorce settlements dispute resolution family law multiple treatment matching