In this paper we use a signaling model to analyze the effect of (endogenously-determined) third-party non-recourse loans to plaintiffs on settlement bargaining when a plaintiff has private information about the value of her suit. We show that an optimal loan (i.e., one that maximizes the joint...

We develop a model wherein a reputation for prosecutorial malfeasance reduces the willingness of witnesses to cooperate with prosecutors. This causes an increase in the crime rate and in wrongly-convicted innocent defendants. Because citizens are taxpayers and may be victims, perpetrators,...

In this paper we examine the behavior of a firm that produces a product with a privately-observed safety attribute; that is, consumers cannot observe directly the product's safety. The firm may, at a cost, disclose its safety prior to sale; alternatively, if a firm does not disclose its safety...

Firms communicate product quality attributes to consumers through a variety of channels, such as pricing, advertising, releases of research reports and test results, or warranties and returns policies. The conceptualization of the economics of such communication is that it takes on one of two...

We model appeals courts as Bayesian decision makers with private information about a supreme court's interpretation of the law; each court also observes the previous decisions of other appeals courts in similar cases. Such 'persuasive influence' can cause 'herding' behavior by later appeals...

We develop a model of individual prosecutors (and teams of prosecutors) to address the incentives for the suppression of exculpatory evidence. Our model assumes that each individual prosecutor trades off a desire for career advancement (by winning a case) and a disutility for knowingly...

We discuss the implications of various models of settlement negotiations for the revelation or suppression of private information held by the parties. This information may be relevant to multiple audiences, including those involved in the instant lawsuit; other potential litigants that may...

This Handbook chapter provides a brief review of selected settlement bargaining models in some areas where new work is developing and where additional work is likely to yield yet further important results. This work has focused on what might be thought of as the environment of the settlement...

A significant policy concern about the emerging plaintiff legal funding industry is that loans will undermine settlement. When the plaintiff has private information about damages, we find that the optimal (plaintiff-funder) loan induces all plaintiff types to make the same demand, resulting in...

In this paper we consider two means for implementing the informational benefits of the Scottish verdict, which we have previously shown provides increased information to society and reduces the misapplication of informal sanctions on defendants and prosecutors. First, we consider a proposal by...