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,...

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...

We develop a signaling model of final offer arbitration (FOA) in which the informed party makes the final settlement demand to the uninformed party. In FOA, each party submits a proposal to an arbitrator and if no agreement is reached, the arbitrator must select one of the two submitted...

We conduct an experimental analysis of pretrial bargaining, while allowing for the costly voluntary disclosure of private information in a screening game. In this game, the theoretical prediction is that costly voluntary disclosures will not occur. This hinges on the prediction that the person...

We conduct an experimental analysis of pretrial bargaining, while allowing for the costly disclosure of private information in a signaling game. Under the theory, 100% of plaintiffs with a weak case are predicted to remain silent, while 100% of the plaintiffs with a strong case are predicted to...

We develop a signaling model of final offer arbitration (FOA) in which the informed party makes the final settlement demand to the uninformed party. In FOA, each party submits a proposal to an arbitrator and if no agreement is reached, the arbitrator must select one of the two submitted...