The paper analyzes the effects of different litigation cost allocation rules, detection skill of judges (judicial errors), and the mode of enforcement of foreign judgments on the home bias in trade and sheds a new light on the so-called border-effect puzzle. In our model the border effect or...

In litigation models, the parties' probability to succeed in a lawsuit hinge upon the merits of the parties' claims and their litigation efforts. In this paper we extend this framework to consider an important procedural aspect of the legal system: the standard of proof. We recast the...

We consider strategic behavior in non-Coasean litigation: private disputes such that the court's judgment may influence the final allocation of rights even if transaction costs are zero. This occurs when the law prohibits otherwise-profitable efforts to contract around the court's judgment. This...