This paper studies how litigation and settlement behavior is affected by agents motivated by spiteful preferences under the American and the English fee-shifting rule. We conduct an experiment and find that litigation expenditures and settlement requests are higher for more spiteful...

This paper analyzes the incentive properties of the standard and burden of proof for a finding of negligence, when evidence is imperfect and rests with the parties. We show that the preponderance of evidence' standard provides maximal incentives to exert care. This holds even though litigants...

This paper explores the prisoner's dilemma that may result when workers and firms are involved in labour disputes and must decide whether to hire a lawyer to be represented at trial. Using a representative data set of labour disputes in the UK and a large population of French unfair dismissal...

This paper introduces the concept of emotions into the standard litigation contest. Positive (negative) emotions emerge when litigants win (lose) at trial and are dependent in particular on the level of defendant fault. Our findings establish that standard results of litigation contests change...

Most patent pools are formed in the shadow of patent litigation as an attempt to settle disputes in regard to conflicting infringement claims and the validity of patents. To reflect this reality, I develop a simple framework to analyze the incentives to form a patent pool or engage in...

This paper analyzes patent pools and their effects on innovation incentives. It is shown that the pro-competitive effects of patent pools for complementary patents naturally extend for dynamic innovation incentives. However, this simple conclusion may not hold if we entertain the possibility...

We construct game theoretic foundations for bargaining in the shadow of a trial. Plaintiff and defendant both have noisy signals of a common-value trial judgment and make simultaneous offers to settle. If the offers cross, they settle on the average offer; otherwise, both litigants incur an...

This paper examines the strategic effects of case preparation in litigation. Specifically, it shows how the pretrial efforts incurred by one party may alter its adversary’s incentives to settle. We build a sequential game with one-sided asymmetric information where the informed party first...