Endogenous Judge Decision Quality, Monotonicity, and Treatment Effects

Abstract
I consider a setting where judges differ in the quality of their decisions and sort unobservable types into two groups, and identify properties of evidence generation processes which lead to violations of monotonicity. These violations cause the local average treatment effect (LATE) estimand to be invalid, as noted in the literature. Moreover, variations in judge decision quality make it impossible to use existing outcomes tests to make inferences regarding judge decision criteria, and therefore discriminatory practices adopted by judges, even when they do not lead to monotonicity violations. I then consider the impact of policy responses that adjust the cost of one type of decision error relative to another. When judge decision quality is determined endogenously, an increase in the relative cost of false positives can increase judges' correct positive rates only if higher judge decision quality is associated with a reduction in both types of decision errors. This provides an additional testable implication of monotonicity violations based on judges' responses to policy changes. I also show that when the LATE estimand is valid, policies can generate unintended consequences only if the signs of treatment effects vary across subjects of different types. Thus, I identify conditions under which LATEs as well as average treatment effects conditional on subject type can be ascertained even when monotonicity is violated, and propose a test of these conditions.

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About the speaker
Coming from George Mason University, Professor Murat C. Mungan joined Texas A&M University School of Law in Spring 2023. As a leading scholar of law and economics, his research focus is on the economics of law enforcement and criminal law. He also analyses issues in antitrust, intellectual property, and contracts. Published in some of the most prestigious law journals, Professor Mungan currently serves as editor for the Review of Law and Economics and as an associate editor for the International Review of Law and Economics.