We present an experimental analysis of the signaling and screening models of litigation. In both models, bargaining failure is driven by asymmetric information. The difference between the models lies in the bargaining structure: In the signaling game, the informed party makes the final offer,...

Olson (1965) argues that some large groups can overcome the free-rider problem through by-product lobbying. The by-product firm sells a private good to potential members of the interest group and finances lobbying with its profits. George Stigler (1974) argued that by-product lobbying firms...

In a model of pretrial bargaining under asymmetric information, we analyze the defendant’s threat to proceed to trial in the face of a rejected offer. The incidence of trial is lower when the defendant’s constraint is binding compared with the unconstrained case. The signs of some of the...

We develop a model of pretrial bargaining under asymmetric information where both the plaintiff and the defendant’s cost of proceeding to trial is an increasing function of the judgment at trial. This contrasts with the standard assumption that costs at trial are a constant. As a result of...

We extend the signaling model of Reinganum and Wilde (1986) by allowing for the possibility of negative expected value (NEV) suits. If filing costs are positive, then there exists a separating equilibrium such that plaintiffs with NEV suits choose not to file. By making the filing decision...

A government sets the level of taxation in order to provide a public good valued by consumers. There are two groups of consumers, the rich and the poor. The government has redistributive preferences, but is initially constrained to use lump sum taxation. This potentially leads the government to...

As a result of public outrage over lower prescription drug prices in Canada, Congress passed legislation that would allow these drugs to be imported into the United States. The lower Canadian prices reflect price regulation. Opponents of allowing these imports have argued that the U.S. will...

A standard result in the litigation literature is that the informed party will not make a costly voluntary disclosure in a screening game. We develop a screening game in which an uninformed plaintiff makes an offer to an informed defendant. Under the American rule for the allocation of trial...

We conduct an experimental analysis of discovery in both the signaling and screening games, where in both games an uninformed defendant may engage in costly discovery. Under the theory, the defendant should invoke the costly discovery procedure in the screening game, but not in the signaling...

I develop models in which a minimum winning coalition decides on the level of government spending, where the Coase theorem holds amongst members of the winning coalition. An increase in the supermajority requirement has potentially conflicting effects on spending. A higher requirement increases...