Stampede to Judgment: Persuasive Influence and Herding Behavior by Courts

Abstract

We model appeals courts as Bayesian decision-makers with private information about a supreme court's interpretation of the law; each court also observes the previous decisions of other appeals courts in similar cases. Such 'persuasive influence' can cause 'herding' behavior by later appeals courts as decisions progressively rely more on previous decisions and less on a court's private information. We provide an example drawn from a recent U.S. Supreme Court decision finding unconstitutional a basic provision of a law previously found constitutional by six Circuit Courts. Herding on the wrong decision may remain uncorrected, since review of harmonious decisions is rare.

Note: Previously Vanderbilt University, Economics Working Paper No. 98-W07

JEL Classification: K4, D82, D70