This paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations, the United States and Japan. Besides comparing disputes in both locations, we evaluate disputes between them. While we find nominal differences between the...

Asymmetric information is a leading explanation for settlement failure that results in a costly trial. Typically, the information in question is assumed to have bilateral payoff relevance, meaning it affects the expected payoffs of both the plaintiff and defendant. When there is bilateral payoff...

Prostitution is a multi-billion dollar, globally distributed, low-concentration service industry that is receiving increasing attention in the economics literature. This article focuses on a widespread, but little studied, feature of this environment—the role of intermediaries (pimps or...

We analyze contingency fees in the Reinganum and Wilde (1986) signaling model of litigation. The effect of contingency fees on settlement depends on the details of the contingency fee contract and the nature of the informational asymmetry assumed in the model. Introducing bifurcated fee...

We extend the 1986 signaling model of Reinganum and Wilde by allowing for the possibility of negative expected value (NEV) suits. If filing costs are zero, the equilibrium consistent with the D1 refinement implies that settlement offers face a rejection rate of 100%. If filing costs are...

The trust game has been widely studied in the laboratory and is often presented as a model of exchange with incomplete contracting. The standard presentation of the game differs in three potentially important ways from the naturally occurring transactions it represents: buyer-seller framing,...

Frequently, parties make sequential decisions regarding investments for which the probability of success or failure is dependent on the amount of total investment. This paper reports a series of experiments involving a costly investment game that is derived from the catalytic finance model of...

This article reports laboratory experiments investigating behavior in which players may make inferences about the intentions behind others' prior actions based on higher- or lower-accuracy information about those actions. We investigate a trust game with first mover trembling, a game in which...

When the value of a product or service is uncertain, outcomes can be inefficient. A market for evaluations can theoretically increase efficiency by voluntarily eliciting an evaluation that would otherwise not be provided. This paper uses a controlled laboratory experiment to test the performance...