Matching with Moral Hazard: Assigning Attorneys to Poor Defendants

We model the problem of assigning counsel to poor defendants as a matching problem. A novel aspect of this matching problem is the moral hazard component on the part of counsel. Within the model, we show that holding the total expenditure for counsel fixed and changing the matching procedure to accommodate defendants’ and attorneys’ preferences, i.e., switch from random matching to stable matching, defendants become worse off because a stable matching exacerbates the moral hazard problem on the part of counsel. In addition, we show that under suitable conditions random matching is the efficient way to allocate defendants to counsel. (JEL D82, D86, K41)