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Steven M. Shavell, The Appeals Process and Adjudicator Incentives, 35 J. Legal Stud. 1 (2006).

Abstract: The appeals process—whereby litigants can have decisions of adjudicators reviewed by a higher authority—is a general feature of formal legal systems (and of many private decision-making procedures). The appeals process leads to the making of better decisions because it constitutes a threat to adjudicators whose decisions would deviate too much from socially desirable ones. Further, it yields this benefit without absorbing resources to the extent that adjudicators can anticipate when appeals would occur and would want to make decisions to forestall the actual occurrence of appeals.