The judiciary system can be considered as a large market where justice is traded in terms of legal disputes. What usually comes out from empirical evidence (not only in Italy but also elsewhere) is that the deman of justice goes up over time despite the high costs (also different from delaying) of filing. More precisely, there are sectors, like family or labour, where such increase in the demand side is normally due, on the one hand, to population growth and, on the others, to some changes in social habits recognised by laws, such as divorce and more recently mobbing. Whereas, there are other sectors, including those disputes regarding land, property and obligations, where the increase on the demand of justice, on one hand, should not be influenced by social or economic changes and, on the other hand, only in part can be just i part explained in terms of population growth. Rather, we argue that especially in these sectors plaintiffs are not fully informed about the true costs (including delay) of filing. About that, the main problem is represented by the fact that since people on average have no technical skill to value their probability of winning a dispute, thy cannot rationally form their own demand by themselves, but have to refer to an expert, the lawyer, who will decide (or, at least, will influence client's decision of) whether to file a dispute or not. In other words, there is an adverse selection process between lawyers and their clients which may lead to an uncontrolled increase of the demand of justice over the rational level. As we will try to show in this paper, such situation is enphasized where there is a higher density of lawyers, because they compete each other in order o attract potential clients . Therefore, we use an instrumental variable approach in order to demonstrate that a high number of lawyers in a geographical area as a significant impact on the increase in legal disputes in the same area.
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