This paper presents a strategic model of incentives for care and litigation under asymmetric information and self …

This paper presents a strategic model of incentives for care and litigation under asymmetric information and self …

of the costs of pursuing the punitive claim), which promotes unnecessary litigation, the escalation of liability … the state. Our paper presents a strategic model of litigation under a negligence rule. We extend Spier's (1997 …) theoretical framework on litigation by explicitly modeling frivolous lawsuits. In this way, we capture the main welfare effects of …

, plaintiffs are more willing to accept lower settlement offers and therefore, the firm's expected litigation loss is lowered under … this statute. It is important to note, however, that the reduction in the firm's expected litigation loss will affect its … a strategic model of litigation under asymmetric information to investigate the effect of the split-award reform on the …

twofold: First, it establishes a workhorse model of settlement and litigation in the shadow of appeals which may be used in … future research to analyze specific issues of litigation and legal reform. Second, the importance of including the … possibility of appeals in the litigation model is highlighted by an example in which some results contradict the immediate …

Empirical studies have found that high litigation costs often discourage small firms from investing in R&D, as they … fear their patent will be infringed and they will not be able to afford litigation. As a solution, firms have been … litigate so that settlement terms are more favorable to the insured, and potential infringement is less likely to occur …

While it is typically taken for granted that settlement of lawsuits increases social welfare, this paper shows that … settlement can lower welfare. If the defendant has private information about the harm from his action both at the time of the … action and the time of settlement bargaining, then defendants who cause different levels of harm can pay the same settlement …

exist any verifiable performance signal. It is shown that ex-post litigation can restore incentives of the agent. Moreover …, when the litigation can be settled by the parties the pure threat of using the legal system may suffice to make the … situations where the agent is protected by limited liability, where the parties have different technologies in the litigation …