Overconfidence and Settlement in a Mexican Labor Court

Last registered on January 20, 2017
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Pre-Trial

Trial Information

General Information

Title
Overconfidence and Settlement in a Mexican Labor Court
RCT ID
AEARCTR-0001940
Initial registration date
January 20, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 20, 2017, 5:34 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Mexico
Region
Federal District

Primary Investigator

Name
Joyce Carol Sadka
Affiliation
INSTITUTO TECNOLOGICO AUTONOMO DE MEXICO
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Other Primary Investigator(s)

PI Name
Christopher Woodruff
PI Affiliation
UNIVERSITY OF OXFORD
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PI Name
Enrique Seira Bejarano
PI Affiliation
INSTITUTO TECNOLOGICO AUTONOMO DE MEXICO
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Additional Trial Information

Status
On going
Start date
2015-12-01
End date
2017-02-28
Keywords
Governance, Labor
Additional Keywords
labor courts, settlement, overconfidence, firing, litigation
JEL code(s)
K31, K41, K42, J83
Secondary IDs
Abstract
We work with the Mexico City Labor Court, one of the largest of its kind in Latin America. Like many courts in developing countries, it has long delays, and lower settlement than systems with better rule of law. We design and implement an experiment to address two related obstacles to settlements, misinformation of the plaintiff (worker) and overconfidence of the plaintiff and her lawyer about the probability of recovery and the amount of recovery. The experiment consists of providing statistical information to parties and their lawyers about the results of lawsuits from a large data base of concluded conflicts at the same court. Predictions are based on all observable case characteristics. We also survey parties and their lawyers, especially focusing on measuring expectations and the knowledge of worker's in relation to their claims and the labor law. We confirm high levels of overconfidence and are able to show their relationship to lower settlement rates. The interventions consist of providing the statistical information and then inviting parties to ask to speak with a conciliator, and obliging parties to talk to a conciliator without providing them with any statistical information. The basic results are that the calculator treatment almost doubles the settlement rate on the day of the hearing, and this effect grows very slightly over the next 8 months. The effect is entirely due to cases where the worker herself was present at the hearing, which are only around 20% of the treated cases.
External Link(s)

Registration Citation

Citation
Bejarano, Enrique Seira, Joyce Carol Sadka and Christopher Woodruff. 2017. "Overconfidence and Settlement in a Mexican Labor Court." AEA RCT Registry. January 20. https://doi.org/10.1257/rct.1940-1.0
Former Citation
Bejarano, Enrique Seira, Joyce Carol Sadka and Christopher Woodruff. 2017. "Overconfidence and Settlement in a Mexican Labor Court." AEA RCT Registry. January 20. https://www.socialscienceregistry.org/trials/1940/history/13282
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
The interventions include coding a large data base from concluded case files to calibrate a calculator that predicts based on individual case characteristics the likelihood of each possible outcome, as well as the duration of the case and the amount recovered under that outcome. Second, the interventions included providing personalized statistical information from the calculator to parties and lawyers, and allowing them to then seek a conciliator's advice on settling the conflict. Third, the interventions included obliging parties and their lawyers to meet with a conciliator briefly before their hearing. Finally the interventions included surveying the parties and lawyers before and after their hearings and the experimental treatments.
Intervention Start Date
2016-03-02
Intervention End Date
2016-05-27

Primary Outcomes

Primary Outcomes (end points)
The key outcomes are the settlement rate, the amount of settlement, the date of settlement, the expectations of the parties and lawyers on the probability of winning, duration, and the amount of recovery.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Of all case files notified on time for their hearings on a given day, we randomly assign three groups, a control group, a calculator group, and a conciliator group. The control group only fills out a survey and continues to the hearing, after which these parties and lawyers fill out an exit survey to measure possible changes in expectations. The calculator group, in addition to the same activities as the control group, is provided with statistical information about the likelihood of lawsuit outcomes, their durations, and the expected recovery/payment, and then may speak to a conciliator voluntarily to explore a possible settlement. The conciliator group also carries out all the activities of the control group, and in addition is obliged to talk to a conciliator before the hearing.
Experimental Design Details
Randomization Method
Randomization program run by a visual basic application written by the research team.
Randomization Unit
The randomization unit was case file X hearing date, the hearing rate is important since some case files repeated on different days of the experiment and could experience different treatments.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Clustering by case file, day of hearing, and by lawyer.
Sample size: planned number of observations
1000
Sample size (or number of clusters) by treatment arms
300 per treatment arm considering some lawsuits treated more than once
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
INSTITUTIONAL REVIEW BOARD ITAM
IRB Approval Date
2015-12-07
IRB Approval Number
001/2015
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials