We examine the effect of "split-award" statutes (wherein the State takes a share of a punitive damages award) on equilibrium settlements and the incentives to go to trial. We find that split-award statutes simultaneously lower settlement amounts and the likelihood of trial, as both parties act...

This paper presents a strategic model of incentives for care and litigation under asymmetric information and self-serving bias, and studies the effects of caps on non-economic damages. We contribute to the theoretical law and economics literature by providing the first assessment of the effects...

This paper presents a strategic model of incentives for care and litigation under asymmetric information and self-serving bias, and studies the effects of damage caps. We contribute to the behavioral economics literature by generalizing the perfect Bayesian equilibrium concept to environments...

This article translates and extends Becker (1968) from public law enforcement to private litigation by examining optimal legal system design in a model with private suits, signals of case strength, court error, and two types of primary behavior: harmful acts that may be deterred and benign acts...

An injurer undertakes precautions to reduce both the probability and the severity of an accident. The damages that the victim suffers are privately observed, and will be verified at a cost if the case is litigated. While finely tuned damage awards induce the injurer to take appropriate...

Courts assessing compensatory damages awards often lack adequate information to determine the value of a victim's loss. A central reason for this problem, which the literature has thus far overlooked, is that courts face a dilemma when applying their standard information-forcing tool to the...

We examine the effect of the "split-award" tort reform (wherein the State takes a share of a punitive damages award) on equilibrium settlements and the incentives to go to trial. Using both signaling and screening models of settlement negotiations, we find that the equilibrium settlement is...

This Article challenges the dogma of U.S. patent law that direct infringement is a strict liability tort. Impermissibly practicing a patented invention does create liability even if the infringer did not intend to infringe or know about the patent. The consensus is that this is a form of strict...

The U.S. class action regime is supposed to obtain justice for victims and hold wrongdoers accountable. Instead, the system is filled with pathologies that combine to harm class members and allow defendants to minimize their responsibility. Victims are deprived of their property and due process...

This chapter presents a strategic model of incentives for care and litigation under asymmetric information and self-serving bias, and studies the effects of damage caps. Our main findings are as follows. First, our results suggest that the defendant's bias decreases his expenditures on accident...