courts to examine the determinants of two salient adjudicatory outcomes: whether a case was resolved via trial or settlement …

It is often argued that even if optimal ex-post, settlement dilutes deterrence ex-ante. We analyze the interest for the … tax authority of committing, ex-ante, to a settlement strategy. We show that to commit to the use of settlements is ex … settlement as a policy tool. …

then makes a settlement offer. Overinvestment, or bluff, always prevails in equilibrium: with positive probability …