Presentation on theme: "Does within-tenure experience make you tougher? Evidence from competition law. Ludivine Garside, Paul Grout & Anna Zalewska Public Organisation Conference."— Presentation transcript:
Does within-tenure experience make you tougher? Evidence from competition law. Ludivine Garside, Paul Grout & Anna Zalewska Public Organisation Conference 12 th June 2008 Centre for Market and Public Organisation
3 Motivation There are many situations where attitudes, perceptions, skills, etc., are responsive to past experience and changing social and workplace environments. May be tempered or fostered by market forces. Where market forces, or their analogues, are more muted then within-tenure experience could potentially have far greater and varied impact (life-tenure of judges). Public officials have weak external competitive forces Judicial discretion v rules
4 Literature on judgements in legal and investigative arenas (De Paulo and Pfeifer (1986) Meissner and Kassin (2002), Kassin and Tong (1999) and Porter, Woodworth and Birt (2000)). Conclusions: Experience and training do not improve the ability to make the right judgement. Experience has a significant impact on the confidence that the subject has in his/her personal judgement Experience increases the likelihood of the subject responding deceit as opposed to truth in experiments.
5 What and why? This study looks if there are within-tenure experience effects on the judges and investigators: –direct economic relevance –based on real world legal cases rather than experiments –use economic factors to deal with the heterogeneity of cases - these economic factors give an additional test
6 Public interest test (not defined - large element of discretion – problem of quality of decision –claim not matter ). Panel both conducted the investigation and made the judgement Track the decisions and experience of individual subjects - separate out cohort effects, individual effects, and age from within-tenure experience - identify off individual change in experience. Unambiguous decision Legal process was virtually identical throughout the period Chairperson of the investigative panel was extremely influential in the process Unique data set
7 Davies et al. (1998, 1999) Ashenfelter et al (1995) Besley and Ghatak (2005) Prendergast (2007) Econ/Gender literature
8 Choice of chairman of investigating panel: Chairman of investigation chosen almost exclusively from Commission Chair or Deputy Chairs Conflict of interest Balanced load Exception would be if a fundamental case arises Experience and complex cases
9 Data Investigations for possible abuse of a monopoly situation, published between 1970 - 2003 Investigation level: –431 company observations, –85 cases –122 company observations with profitability, (1970-1996)
14 Firm levelCase level Least experienced 0.550.51 Second least experienced0.450.69 Second most experienced0.710.74 Most experienced0.78 Least experienced0.470.59 Mid experienced0.620.68 Most experienced0.780.80
15 Approach Probit Independent cases Firm-level observations cannot be treated as independent – need to account for intra-cluster correlation (at case level and at chairman level)
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