APPEAL AND SUPREME COURTS
Lewis A. Kornhauser
Professor of Law, New York University School of Law
© Copyright 1999 Lewis A. Kornhauser
This chapter surveys the economic literature on judicial appeals and collegiality
of courts. More general issues concerning judicial administration and court
organization are surveyed in a companion chapter.
JEL classification: K4
Keywords: Appellate Courts, Appeals, Adjudication, Supreme Courts
This chapter reviews the literature concerning several issues raised in the
economic analysis of appeal and of supreme courts. These issues overlap those
considered in Chapter 7100, Judicial Organization and Administration.
Appellate courts in general and supreme courts in particular exist only in
hierarchically organized court systems.
Most of the literature has focused on courts in common law countries.
Indeed, most models that extend beyond the simplest features of adjudication
do so in the context of the political system of the United States. This review
consequently shares the parochial focus of the literature. Analyses of appeal in
civil law systems and in the context of different political systems would greatly
advance understanding of the subject as they often present different institutional
features. At least some civil law systems, for example, allow an appellate court
to make an independent assessment of the facts of the case, a judgment denied
common law courts. Similarly, the highest courts in some civil law jurisdictions
hear substantially more cases than the highest courts in common law countries,
a fact that may explain, or be explained by, differences in precedential practice
and in the style and content of judicial opinions.
2. Explanations of Hierarchy
Appeal, and supreme courts, only arise in court systems which are organized
hierarchically. Why does hierarchy occur? Posner (1985) suggested that the
primary function of a supreme court was law creation and the insurance of
uniformity of application of law among the lower courts. In addition, he argued
that, in the United States, concerns about unreviewable power implied that trial
courts would be subject to some supervision. These ideas have not been much
elaborated in the literature. Rather, two distinct research strategies have
emerged from two different models of adjudication. The ‘team’ model assumes
that all judges in the system share a common objective function - to maximize
the number of ‘correct’ decisions rendered by the system. Hierarchy emerges
because it somehow promotes the goal of error minimization. The ‘political’ (or
‘principal-agent’) model assumes that judges differ in their objective functions.
Hierarchy arises in this model so that the small set of politically dominant
judges can enforce their views on recalcitrant judges lower in the hierarchy.
Kornhauser (1995) provides an informal team model that explicitly
addresses the question of the optimal organization of n judges into a judicial
system. Judges share the goal of minimizing the number of errors; the
likelihood of a correct decision depends on the amount of effort the judge
invests in deliberation on the case. Moreover, deliberation on a specific case
also provides a signal about the correct resolution of ‘nearby’ cases. Because
the court faces a resource constraint, the question of optimal organization of
judges arises. Kornhauser argues that, in appropriate circumstances, a
hierarchy will emerge in which there is (a) division of labor between trial
judges who find facts and appellate judges who determine the law; and (b) strict
vertical stare decisis so that lower court judges will always adhere to the
decisions of higher court judges. Models of hierarchy that emphasize the need
for consistency as in Rogers (1995) and Dorf (1995) are team models in which
the ‘correct decision’ requires consistency.
3. Team Models of Error Correction
Shavell (1995) is the earliest formal model of error correction. Shavell assumes
that the state must decide first, whether to establish both trial and appellate
courts or trial courts only; and second, how many resources to devote to each
level of court that it establishes. The probability of correct decision by a court
increases with increased allocation of resources to that court. The state seeks
to minimize social costs which consist of the costs of the judicial system and the
costs created by wrongly decided cases. A trial court is characterized by the
probability (as a function of state resources) that it will render the wrong
decision. Litigants know for certain whether a court has correctly decided their
case. An appellate court is characterized by two probabilities (as functions of
state resources devoted to appeal): the probability q(y) that an incorrect trial
decision will be reversed on appeal and the probability r(y) that a correct trial
decision will be reversed on appeal. Litigants know with certainty whether the
court has rendered a correct decision. Litigants face a cost to appeal. It is
straightforward to see that, if q(y) > r(y) and if the court can impose fees or
give subsidies for appeal, then the state can insure that only cases wrongly
decided at trial will be appealed.
Shavell then characterizes the state’s optimal strategy by showing when
appellate courts should be created and how resources should be divided between
trial and appellate levels. He also shows that litigant selection of cases is
superior to the random review of trial court decision. When a court undertakes
random review of lower court cases, it unnecessarily uses resources to
reconsider some correctly decided cases; under litigant selection (with the
appropriate subsidies and fees), by contrast, only cases that should be
reconsidered are in fact reviewed.
Cameron and Kornhauser (1996) offer a more strategic model of error
correction that formalizes a portion of the argument in Kornhauser (1995).
Their paper divides into two distinct parts. First, they identify conditions under
which it would be desirable to add an additional level of appeal to a court
structure. They define the selectivity of a process as the ratio of the proportion
of wrongly decided cases that would be appealed to a new tier to the proportion
of correctly decided cases that would be appealed to a new tier. They define the
error correction ratio as the ratio of the probability that the new appellate court
would reverse a wrongly decided case on appeal to the probability that the new
appellate court would uphold a rightly decided case on appeal. They prove that
an additional tier of review is desirable if the appeals process is sufficiently
selective or sufficiently error correcting.
The second part of Cameron and Kornhauser’s argument considers a
particular technology of review. The correct decision of a case depends on the
defendant’s type which, initially, is known to the defendant but not to the
plaintiff. At trial, the plaintiff, but not the court, becomes fully informed about
the defendant’s type. A court’s ability to discriminate among defendant types
is a function of the effort it invests in the case. Litigants incur a cost each time
they appeal. Judges seek first to maximize the number of correct decisions; in
addition a judge prefers not to be reversed. Cameron and Kornhauser show
that, when litigants select cases for appeal, the hierarchy will have three tiers.
They also study the process when the appellate courts select cases for review.
4. Political Models of Review
4.1 Models of Pure Adjudication
Political models generally justify appellate review in terms of law making. They
do this in large part because the structure of the model requires that
interpretation. Each court usually has preferences over policy space. Thus, to
decide a case is to announce a policy, or, put differently, to announce a new
Cameron (1993) presents the political model of review in its starkest form.
There is one supreme court and n lower courts. Each court has spatial
preferences over a one-dimensional policy space. There is complete information
so that each lower court knows the supreme court’s ideal point and the supreme
court knows the location in policy space of the decision of each lower court.
Each lower court seeks to maximize its utility which depends only on the final
decision in the case it decides; the supreme court wants to maximize its utility
which is a function of the decisions in all cases. The game has two stages: in
stage 1, each lower court issues a decision; in stage 2, the supreme court selects
at most only one case for review. There is a unique equilibrium to this game in
which each lower court decides its case by announcing the ideal policy point of
the supreme court as its decision and the supreme court reviews no case because
it has already achieved its optimum utility. No other pattern of lower court
decisions is an equilibrium because, in any other pattern, the lower court that
will be reversed on appeal has an incentive to alter its strategy.
McNollgast (1995) offers a more elaborate political model, which focuses
on conflicts in the policy views of the supreme court, the legislature and the
lower courts. To enforce its views the supreme court must both induce lower
courts to adhere to its ‘doctrine’ and avoid reversal through legislation.
McNollgast extends the model of Cohen and Spitzer (1994). They consider a
three stage game in which the supreme court first identifies the range of
acceptable decisions in policy space. In stage 2, the lower courts decide whether
to adhere to supreme court ‘doctrine’. In stage 3, the supreme court reviews
some subset of the lower court decisions; the number of cases reviewed is
determined by the supreme court’s budget. Each case presents a single issue in
a K-dimensional policy space. Each judge has separable, spatial preferences
over this policy space, an assumption that reduces a decision in any given case
to the framework outlined in Cameron. That is, each judge’s preferences can
be represented by an ideal point in each dimension such that she prefers any
decision closer to that ideal point to one further away. The supreme court has
preferences defined over the outcomes of all cases decided within the system
but each lower court has preferences defined over its case load only. Moreover,
the supreme court does not know either the ideal point of any specific court nor
the actual decision rendered by a lower court. The supreme court does know the
distribution of ideal points of lower courts and it does know whether a lower
court has complied with supreme court doctrine. It will thus choose to review
some random sample of non-complying lower courts; upon review it will learn
their actual decisions. Several results flow from this model. First, in general,
some but not all lower courts will comply with supreme court doctrine;
compliance, however, results from the threat of enforcement. Second, the game
has a unique Bayesian equilibrium. Third, as the costs of enforcement rise, the
supreme court may expand the range of acceptable lower court decisions.
4.2 Models of Adjudication Embedded in a Constitutional System
Many if not most cases on the appellate docket do not present common law
issues; rather they raise issues of statutory or constitutional interpretation. The
decisions of the courts thus rely on, and affect, the decisions of other political
actors including administrative agencies, legislatures and the executive. Most
applications of the political model to adjudication have concerned these
The two earliest applications to adjudication appear to be Ferejohn and
Shipan (1990) and Gely and Spiller (1990). They adopt similar but not
identical frameworks. Specifically, Ferejohn and Shipan assumed that all
political actors had preferences over a one-dimensional policy space while Gely
and Spiller assumed that institutional actors had preferences over a
multi-dimensional policy space. I set out the Ferejohn and Shipan model here
because of its simplicity and because most subsequent models exploit their
formulation. Gely and Spiller (1990) is discussed in Section 5 in the context of
its interesting model of doctrine.
Ferejohn and Shipan analyze the effects of judicial review on the activities
of administrative agencies. In addition to the assumption of a one-dimensional
policy space, their results depend critically on the sequence in which the
institutions act. In their model, the agency acts first. It is then subject to judicial
review. The court, in turn, is subject to potential legislative overrides. (They
study both the case of overrides that require a presidential veto and those that
do not.) They show that judicial review may shift the equilibrium policy
towards the policy preferred by the legislature.
Eskridge and Ferejohn (1992a, 1992b) use the model in Ferejohn and
Shipan to analyze the balance of powers in the US Constitution in general and
the effect of INS vs. Chadha, on that balance of power. Chadha ruled that
legislative vetoes of administrative action were unconstitutional. According to
Eskridge and Ferejohn this ruling shifted power to the agencies; put differently,
the decision made Congressional delegations of power to administrative
agencies less desirable.
The literature employing variants of this political model have proliferated.
For instance, Gely and Spiller (1992) present a three-stage game in which, in
the first stage, an administrative agency announces an interpretation of a
statute; in the second stage the court reviews the agency interpretation; and in
the third stage the legislature decides whether to overrule the Supreme court
and announce its own policy outcome. Note that in each stage the interpretation
is an announcement of a policy. Each actor has spatial preferences over a one
dimensional policy space. The model predicts that the court will always pick
that policy that is best for it and just avoids legislative overruling. Gely and
Spiller investigate several variants of this structure in which the legislature is
modeled somewhat differently. They then test their model on data from the
United States National Labor Relations Board and subsequent review.
Cohen and Spitzer (1994) apply this political model to the analysis of the
effects of another Supreme Court decision, Chevron U.S. A. Inc. v. Natural
Resources Defense Council Inc, which required courts to grant more deference
to an administrative agency’s own interpretation of statutes it implemented.
They assume political actors have preferences over policy-deference pairs. They
then show that the Supreme Court’s rulings on deference respond to the relative
pattern of policy preferences among the other institutional actors: president,
congress, and the appellate court.
Toma (1991, 1996) has argued that the congressional budgetary process
serves as a means to control the decisions of the Supreme Court by signaling
approval or disapproval of the Court’s behavior. Again, both justices and
Congress have spatial preferences over policy space. She examines two times
series of decisions of the Supreme Court of the United States: one consists of
civil liberties cases decided from 1946 through 1988 and the other of economic
liberties cases decided over the same time period. She determines the ‘average
degree of liberality’ of each of these two yearly portfolios of decision and
similarly takes the average ADA rating of the members of the judiciary
subcommittee of the Senate and House appropriations committees. For each
group of cases, she then regresses the size of the yearly Supreme Court budget
on the divergence between the judicial and congressional liberality ratings; she
finds a statistically significant pattern with the budget rising when Supreme
Court opinions conform more closely to the views of Congress. She then
regresses the liberality of the judicial portfolio against the Supreme Court
budget, the parameter of which is also statistically significant.
4.3 Some Other Empirical Studies
There is a vast American political science literature that seeks to determine the
effects of the ‘ideological’ views of the judges on judicial decisions. This
literature in general implicitly accepts the political model of adjudication and
it generally finds at least some influence of ‘ideology’ on outcome, where the
judge’s ideology is measured either by her political affiliation or the affiliation
of the appointing president. In this section, I consider three recent studies
within the legal-economic framework.
The first study, Eisenberg and Johnson (1991), examined 118 federal
district court opinions and 66 federal circuit court opinions in racial
discrimination cases decided under the fourteenth amendment to the US
Constitution. These opinions constituted all opinions on this issue published
between 7 June 1976 and 6 February 1988. Eisenberg and Johnson found no
effect of ideology, measured either by party of judge or of appointing president,
on outcomes at either the district or appellate level. They attempted to evaluate
the effects of the selection of cases for trial on their results by comparing trial
success rates and success rates on appeal in the class of cases that they studied
to these success rates in other classes of cases.
Ashenfelter, Eisenberg and Schwab (1995) (‘AES’) also found no effects of
ideology. In a clever research design, they studied 2258 federal civil rights and
prisoner cases filed in three federal districts courts in fiscal 1981. Unlike most
prior studies, AES examined the effects of ideology not only on cases with
published opinions but on all case dispositions. AES determined whether a case
settled and, if it did not settle, which party prevailed. They also collected data,
including party and party of appointing president, on each of the 47 different
judges who sat on some case in the sample. AES then analyzed this data by
district. This district analysis permitted them to exploit the federal practice of
random assignment of cases to judges. Any observed differences in behavior
across judges could be attributed to differences in judges rather than differences
in cases. They found that judges had relatively little effect on case disposition.
Moreover, ‘ideological’ variables did not explain the small effects observed.
Revesz (1997) studied the industry and environmental challenges to EPA
rulemaking in the 1970s and the late 1980s through early 1990s. This sample
of cases has two features that make it a nearly ideal sample for analysis. First,
all such challenges were heard in the Court of the Appeals for the District of
Columbia. Second, virtually all challenges to EPA rulemaking are appealed.
Given the legal context, there is no opportunity for the agency to settle with
dissatisfied litigants. Following AES, Revesz focused on time periods in which
a large number of judges had continuous tenure on the Circuit; he restricted his
analysis to these judges. He measured the judge’s policy preferences by the
party of the appointing president, assuming that Republicans would favor
industry challenges and disfavor environmental challenges relative to
Democrats. For the late 1980s through early 1990s, he observed that ideology
had a clear effect on industry challenges and a more ambiguous effect on
environmental challenges. (A different statistical test, however, would likely
reveal a stronger ideological effect in environmental challenges.)
5. Modeling Doctrine
Courts in common law systems do more than announce an outcome ‘upheld’
or ‘reverse’ to an appeal. An opinions offers a rationale for the decision and it
is this rationale which guides the decisions of lower courts. To study appeal,
then, the analyst must model this ‘doctrinal’ structure. The literature reveals
two distinct approaches to modeling doctrine, approaches that have already
been alluded to in the prior discussion. The importance of the issue, however,
merits a brief exposition of the two approaches.
One approach, first set forth in Kornhauser (1992b), describes a case as a
vector of fact characteristics. Kornhauser then defines a cause of action as a
pair (S,f) where S is a class of subsets S of the fact space and f is a collection
of functions fS from each subset S into a two-element set that might be
interpreted as (proven, unproven) or (for plaintiff, for defendant). Each S in S
is an issue. A case is then a collection of causes of action. For plaintiff to
prevail on a case, she must prevail on at least one cause of action; to prevail on
a cause of action, the plaintiff must prevail on every issue. The approach
models doctrine essentially in terms of a partition on the fact space and sees the
development of the law in terms of changes in this partition. The approach has
been followed in Kornhauser (1995), Cameron and Kornhauser (1996) and
Cameron, Siegel, and Songer (1996).
The second approach, which adapts the framework of Ferejohn and Shipan
and has been employed by Schwartz (1992), Cohen and Spitzer (1994) and
McNollgast (1995), assumes that the Supreme Court has preferences over a
two-dimensional space. One dimension remains the policy space in the original
political model. The second dimension, variously called ‘deference’ or
‘precedent’, explicitly measures the judge’s level of tolerance for deviation from
her optimal policy choice. In one sense, this modeling strategy parallels that of
the first approach; it also yields a partition of the policy space. More
fundamentally, however, this second approach remains inherently ‘political’
and non-legal; it makes no reference to the facts of a case or features of legal
discourse that appear in an opinion.
Gely and Spiller (1990) offer a variant of this political model of doctrine
that acknowledges some of the structure captured in the legal model. In their
model, justices (and other political actors) have preferences over a
multidimensional policy space. They seek to explain the Court’s choice of
grounds - constitutional or non-constitutional - for the Court’s review of agency
action. They argue that a constitutional decision restricts the discretion of the
agency (or of other political actors) by lowering the dimensionality of the policy
space from which the agency may choose a policy. This ingenious idea captures
the effect of doctrine without requiring that one model the legal attention to
facts and explicit doctrinal structure.
In political models, ‘doctrine’ generally serves to explain the extent of
discretion granted to lower courts (or administrative agencies). Thus, Cohen
and Spitzer (1994) argue that the amount of discretion is a function of the
ideological alignment of the Supreme Court relative to other political actors.
McNollgast (1995) prove that, as the number of cases in a particular area
increases, the amount of discretion granted lower courts never decreases and
it may increase.
Generally, an appeal is decided by a panel of judges rather than a single judge.
In the United States, the three judge panels that sit on federal intermediate
appeals courts are drawn from a larger bank of judges while the nine justices
of the Supreme Court sit en banc. The inverted pyramidal structure of the
federal hierarchy in the United States in which the size of the panel deciding
a case increases as the case rises through the system is a nearly universal
feature of court systems. The highest courts in some civil law countries (for
example, the Cour de Cassation in France), however, function similarly to the
federal intermediate courts, with each case decided by a panel drawn from a
Collegiality presents several puzzles. First, why are appellate courts
collegial and why does the number of judges increase as one proceeds up the
hierarchy? Second, what consequences for adjudication does collegiality have?
The economic literature began with Easterbrook (1982) which addressed the
6.1 Why Are Appellate Courts Collegial?
Posner (1985, p. 12) offered several reasons for the existence of collegiality on
the Supreme Court: (a) multiple judges reduce the costs of poor appointments;
(b) a multiplicity of judges reduces the power of any single judge on a court
which has vast power; (c) a multiplicity of judges allows the court to benefit
from deliberation; and (d) a multiplicity of judges permits the division of the
labor of opinion drafting and hence increases the productivity of the court.
Kornhauser and Sager (1986) provided a more systematic analysis of the
reasons for collegiality. First, they distinguished two conceptions of
adjudication: the rendering of judgment and the expression of preferences.
They then suggested three different models of collegial adjudication, each of
which identified a distinct standard against which to measure judicial
performance. (1) One might view collegial courts as engaged in the aggregation
of the preferences of the judges on the court and one would measure the quality
of the court by its authenticity, the extent to which the court’s judgment
correctly reflects the preferences of the judges. (2) One might view collegial
courts as engaged in the aggregation of judgments and one would evaluate the
court’s procedures in terms of their accuracy, that is, their ability to ‘get the
right answer’ however one defines the right outcome. (3) One might view
collegial courts as representative institutions that seek to reach the outcome that
the represented body would have reached had they deliberated and voted. This
representative model suggests two different evaluative measures: fit, which is
simply the tendency to arrive at results that the represented group would have
reached and reliability, which is the absence of bad surprises.
Kornhauser and Sager reject preference aggregation as an appropriate
understanding of adjudication. This eliminates authenticity as an evaluative
measure. They then argue that increasing the numbers of judges improves
accuracy, fit and reliability. They focus specifically on accuracy and rely on the
Condorcet Jury Theorem.
Good and Tullock (1984) offers a representation model of Supreme court
collegiality. The Justices of the Supreme Court are treated as a representative
sample of the population of competent lawyers. Good and Tullock calculate the
probability p(r,s) that a case decided by a vote of r to s will fit the decision of
the represented group. They determine that p(5,4) = 0.62304 and p(9,0) =
6.2 Consistency and Coherence
In the first model of collegiality, Easterbrook (1982) relied on simple social
choice arguments to argue that one could not expect the Supreme Court of the
United States to generate a consistent body of case law. Easterbrook assumed
that each case presented the Court with a choice between two legal rules to
govern a particular doctrinal realm. When more than two legal rules were
possible and no rule was a Condorcet winner, the Court’s case law would cycle
as successive cases challenged the prevailing rule with an alternative that a
majority of the Court preferred.
Kornhauser and Sager (1986) distinguished between consistent and
coherent patterns of decisions. A court that decides cases consistently will
decide identical cases identically. The definition of coherence was less clear;
a court that decides coherently creates a body of law that exhibits the quality of
conceptual unity. They then argued that a panel of judges, each of whom had
a consistent view of the law would produce a consistent body of law; but a panel
of judges, each of whom had a coherent conception of the law, need not yield
a coherent body of decisions.
Kornhauser (1992a) extended this analysis. Kornhauser identified three
different bases of judicial decision: result-bound, rule-bound, and reason-bound
decision. In a result-bound decision process, the court is obligated to respect the
results of the prior decisions of the court; in a rule-bound process the court is
obligated to respect the rule announced in prior cases while a reason bound
court respects the reasons provided in prior decisions. He then argued that, with
a rule of strict stare decisis, law in a result-bound judicial system will generally
be path dependent and consistent.
Stearns (1995) offered an analysis of the development of the law in a
collegial court that contained elements of both Easterbrook’s and Kornhauser
and Sager’s analysis. Stearns, like Easterbrook, viewed adjudication as
rule-bound though he abandoned Easterbrook’s assumption that a case
presented only two rules. Stearns, however, emphasized the role of both stare
decisis and standing doctrine in ameliorating any cycling problems.
6.3 Voting on Collegial Courts
The doctrinal paradox Kornhauser and Sager (1986) noted a paradoxical
feature of collegial adjudication which later attracted extensive comment.
Specifically, they considered a case that presented two distinct issues for
decision. Legal doctrine determines the relation between the decisions on each
issue and the decision on the case. In some circumstances, the procedure the
court adopts for aggregating votes will determine the outcome of the case. They
discussed two procedures: case-by-case adjudication in which each judge
registers her view of how the case should be decided and the court aggregates
these votes to reach a majority judgment. Alternatively, each judge may register
her view on each issue in the case should be decided; the court then aggregates
the votes on each issue and applies the legal doctrine to the issue-by-issue
results to reach a judgment in the case.
Kornhauser (1992b) named this conflict ‘the doctrinal paradox’ and
extended this analysis in several ways. Recall the formalization of doctrine in
this article that was summarized in Section 5. A single judge decides a case by
deciding each legal issue in each cause of action. To prevail on a cause of
action, the plaintiff must prevail on each issue; to prevail in the case, she must
prevail on at least one cause of action. On a multi-member court, the two
different aggregation methods may lead to different results. Kornhauser showed
that the doctrinal paradox was distinct from the Condorcet cycle. When the
judges’ orderings of outcomes (described as the vector of outcomes on each
issue) yield a Condorcet cycle issue-by-issue and case-by-case voting might not
conflict. Conversely, when the judges’ orderings produced a Condorcet winner
over outcomes, the issue-by-issue result might differ from the case-by-case
result. Finally, he analyzed several actual instances in which the doctrinal
Rogers (1991) examined and classified all plurality opinions of the United
States Supreme Court. He counted approximately 150 such cases. Of these he
identified only eight cases in which the vote of one or two justices effectively
resulted in a court aggregation of votes on an issue-by-issue, rather than a
case-by-case, basis. He argued further that the limited doctirnal incoherence of
case-by-case aggregation was normatively preferable to the inconsistency and
indeterminacy that may result from issue-by-issue adjudication. Leonard (1984)
found a similar paucity of instances of issue-by-issue aggregation in a study of
decisions in criminal cases by the highest courts of Alabama, California,
Indiana, and New York. Rogers based his argument for case-by-case voting on
the grounds that issue-by-issue adjudication may lead to unfair results.
Post and Salop (1992) argued that collegial courts should always aggregate
votes issue-by-issue. They did so on several grounds. First, they disputed the
unfairness of case-by-case aggregation. Second, they argued that case-by-case
aggregation led to path-dependent decision making; framed more positively,
they argued that an aggregation procedure should yield the same results
regardless of the order in which cases arrive before the court. Third,
issue-by-issue aggregation promotes collegial deliberation by inducing the
judges to join issue. Post and Salop (1996) expand and clarify their argument
in favor of issue-by-issue voting. They note that issue-by-issue voting clarifies
the law more quickly than case-by-case voting. Kornhauser and Sager (1993)
then extended their earlier analysis of the doctrinal paradox. They emphasized
the peculiar nature of actual Supreme Court practice which permitted each
judge to count votes as he wished and which suppressed discussion of the
aggregation procedure. they argued that the Court should justify its decision on
whether to resolve case issue-by-issue or case-by-case because the appropriate
decision procedure was context-dependent.
Rogers (1996), Stearns (1996) and Post and Salop (1996) then recapitulated
the debate over the appropriate aggregation method. Rogers noted importantly
that issue-by-issue voting required the Court to identify a set of issues on which
each judge should vote and illustrated the complexity of this task. Stearns
(1996) argues that in fact agreement on issues is not as difficult as Rogers
suggests. Post and Salop (1996) also argue that the identification of issues is
less problematic than Rogers asserts.
Sincere vs. sophisticated voting Analysis of the doctrinal paradox assumed that
each judge voted ‘sincerely’ on each issue regardless of the method of
aggregation of the votes on the court. (Defining ‘sincerity’ in the context of
multiple issue cases presents difficulties that are addressed in a different voting
context in Benoit and Kornhauser (1995).) An assumption of sincerity comports
well with a team model; it does not easily fit into a political model. In a
political model, a self-interested, rational judge should foresee the results of
sincere votes that might be detrimental to the realization of her interests.
Spiller and Spitzer (1995) ask whether judges are voting sincerely or with
sophistication. They assume a court with one sincere judge and show how that
judge can be manipulated by sophisticated judges. In their model, the judges
and the legislature play a two-stage game. In stage 1, the Court interprets a
statute and in stage 2, the legislature decides whether to overrule the court’s
interpretation. All judges and legislators have preferences over a onedimensional
policy space. The model predicts that (1) the legislature will
frequently overrule the court and (2) coalitions of extremes will often form.
They then contend that, as these phenomena are not observed, one should
assume that all judges vote with sophistication.
Revesz (1997), in his study of environmental decisions by the DC circuit,
tested for effects of panel composition on the voting behavior of individual
judges. In particular, he asked whether the reversal rate of a judge depended on
whether she was in the minority or a majority on the panel. He identified
judicial policy preferences with the party of the appointing president and found
substantial differences between the voting behavior of judges in an ideological
minority on a panel from those in an ideological majority.
Schwartz (1992) does not explicitly address the question of sincere vs.
sophisticated voting. He does, however, present a political model of ‘doctrine’
in which each justice acts in a strategic manner. As discussed in Section 4,
‘doctrine’ here refers to a feature of vertical precedent: the probability that a
lower court will respect the Supreme Court’s policy announcement in the case.
Thus, in this model, justices have preferences over a two-dimensional space.
Each justice has an ideal policy; the second dimension measures the degree of
precedent that the justice attaches to the policy. The justice’s preferences are
for less strict precedent the more distant the announced policy is from his ideal
Each case presents the Court with a choice between two policy alternatives.
The sequence of the game is as follows. First, the justices vote in reverse order
of seniority for one of the two policy alternatives. Second, the senior member
of the majority designates an opinion writer who voted for that alternative; the
senior member of the minority also designates an opinion writer. Third, each
opinion writer drafts an opinion that specifies a level of precedent for the
proposed policy. In the fourth stage, the Justices vote between the two
policy/precedent pairs represented by the two opinions. The majority vote
determines the outcome.
Schwartz restricts his analysis to the case in which the Court initially
divides five to four between the two policy alternatives. He calculates the range
of precedent that is invulnerable to invasion by the minority. The senior
member of the majority can then pick an opinion writer that will draft an
opinion with the optimal level of precedent from the senior members point of
view. Schwartz then illustrates his analysis through a discussion of some
7. Discretionary Review
The United States Supreme Court has a largely discretionary jurisdiction. This
discretion cannot be explained in a team model of error correction when
litigants select which cases to appeal, for, as Cameron and Kornhauser (1996)
show, the optimal hierarchy will have only three tiers and the highest tier will
hear no cases. Discretionary review, however, might be explained in a team
model in which the Supreme Court has lawmaking powers.
Cameron, Siegal and Songer (‘CSS’) (1996) use a political model to study
the Supreme court’s certiorari procedure. They assume that the Supreme Court
serves only to correct error. As is typical in political models, both higher and
lower courts have preferences over a one-dimensional policy space. As in
Cameron and Kornhauser (1996), each case is characterized by a single
parameter and each court is characterized by an ideal point so that defendant
should prevail if the value of the case parameter is less than the court’s ideal
point. For ease of exposition, CSS assume that the ideal point of the Supreme
court lies to the right of the lower court’s ideal point. Consequently, the two
courts disagree about the appropriate resolution of the case if its parameter lies
in the interval between the two ideal points. The Supreme court has
discretionary authority to review but it decides to review the lower court
decision on the basis of an index of the parameter rather than the true value
which is both known to the lower court and would be revealed to the Supreme
Court in the course of a review on the merits. Each court wants to maximize the
number of correct decisions (from its point of view); lower courts get disutility
from reversal and the Supreme court incurs cost in the event it decides to
review a case on the merits. CSS characterize the equilibrium strategies of both
lower court and Supreme court. They then present an exploratory analysis of
Supreme Court certiorari practice in search and seizure cases between 1972 and
Discretionary review in the US Supreme Court employs a submajority rule
of four of the nine justices to trigger review. This submajority review raises
interesting legal and strategic questions concerning the behavior of the Justices
themselves. Revesz and Karlan (1988) presented a largely legal analysis of this
rule (and a ‘Rule of Three’ governing the granting of stays) but their analysis
raises a number of issues for economic analysis. They argue that the rule of four
creates a legal process with less stable precedent than a process in which
discretionary review required a majority.
8. Stare Decisis
Stare decisis refers to a set of practices peculiar to Anglo-American courts in
which one court adheres to its own prior decisions or to the decisions of a
higher court. For a fuller discussion of the legal aspect of these practices,
references to the legal literature and the modeling questions they present, see
Several models of horizontal and vertical stare decisis have appeared in the
literature. In this section, I shall focus primarily on models of horizontal stare
decisis in which a court follows its own prior decisions. Discussions of vertical
stare decisis are implicit or explicit in most political models of hierarchy
because these models pose as one of the key questions the extent to which lower
courts comply with the rulings of higher courts. Vertical stare decisis in a team
model is discussed in both Kornhauser (1995) and Cameron and Kornhauser
(1996). Kornhauser (1995) argues that vertical stare decisis arises because of
the benefits presented by specialization of labor between fact finding and law
making and for error-correction reasons. Cameron and Kornhauser (1996)
investigates the error-correction justification in detail.
Heiner (1986) argues that stare decisis arises because courts only observe
the ‘correct’ answer to specific cases with error. A judge might then do better
to announce a decision that is best ‘on average’ (for some class of cases) and
adhere to that decision rather than to make a series of errors on a case-by-case
Kornhauser (1989) characterized horizontal stare decisis as a practice in
which a court adheres to a decision it believes to be wrong. He offers two
informal models based on two distinct justifications for the practice. The first
model applies to a ‘panel court’ in which each case is decided by one or more
judges drawn from a larger bench. If judges have different views of the law then
stare decisis serves to reduce legal uncertainty faced by actors governed by the
legal rule. The second model assumes a unitary court with an unchanging
social objective; the court however faces a world in which the optimal behavior
(as viewed from its perspective) changes because some underlying parameters
change. Kornhauser’s model modifies that in Blume and Rubinfeld (1982) in
which the court, through its announcement of standards of care, seeks to
minimize the costs of accidents and the costs of adjustment to new standards.
In the Blume and Rubinfeld model, the court does not adopt a practice of stare
decisis; rather, as the technology of care shifts, the court adjusts gradually
towards the standards that would be optimal in an unchanging world with the
new technology. In Kornhauser’s version, a court must announce standards of
care in a world in which the technology of accident care is improving at a
known rate. The court adheres to stare decisis as long as the standards of care
optimal under the new technology are not too far from the old standards.
Otherwise it announces new standards that overshoot those currently optimal.
Rasmusen (1994) presents a political model for horizontal stare decisis.
Rasmusen’s model provides a formal justification for an argument implicit in
O’Hara (1993). The court consists of a single judge who decides n + 1 cases
and is then replaced by another judge who also decides n + 1 cases. Each judge
has preferences over the outcomes of all cases and these preferences differ.
Assume that only one of these n + 1 cases is a case of first impression. Under
a practice of stare decisis each judge would adhere to the n prior decisions
governing n of his cases and n subsequent judges would adhere to the decision
he announces in his case of first impression. Rasmusen shows that a practice
of stare decisis is an equilibrium to this game.
9. Concluding Remarks
The study of judicial organization in general and the nature and function of
appeal in particular is in its infancy. Though analysts have begun to investigate
the reasons for hierarchy, the nature of the interaction among courts and other
political branches, and the internal workings of the courts themselves, most
questions remain open or even unaddressed.