A Note on Trial Delay and Social Welfare: The Impact of Multiple Equilibria

Greater trial delay is commonly associated with decreasing demand for trials, thereby bringing about an equilibrium for a given trial capacity. This note highlights that – in contrast to this premise – trial delay may in fact increase trial demand. Such an outcome is established for a scenario in which the number of cases is endogenous based on the deterrence effect of lawsuits. That trial demand may increase with longer delay makes multiple stable equilibria possible. This reality has important policy implications, which are discussed.