This paper analyzes the relation between the quality of the legal enforcement of loan contracts and the allocation of credit to households, both theoretically and empirically.

Witnesses often gain by slanting testimony. Courts try to elicit the truth with perjury rules. Perjury is not truth-revealing; truth revelation is, however, possible. With a truth-revealing mechanism the judge will get little testimony because the defendant will not present witnesses with...

There is extensive literature on whether courts or legislators produce efficient rules, but which of them produces rules efficiently? The law is subject touncertainty ex ante; uncertainty makes the outcomes of trials difficult to predict and deters parties from settling disputes out of court. In...

Within a class action suit, similarly injured individuals can collectively obtain compensation through the justice system. Damage averaging occurs when the compensation awarded by the court to individual members is partly or completely determined by the average damage of the class. The key role...

This article derives the optimal award to a winning plaintiff and the optimal penalty on a losing plaintiff when the probability of prevailing varies among plaintiffs. Optimality is defined in terms of achieving a specified degree of deterrence of potential injurers with the lowest litigation...

The problem of establishing the amount of losses covered by public and private insurance is often characterized by asymmetric information, in which the claimant already knows the extent of a loss but this can be demonstrated to the insurer only at a cost. It is shown that a simple arrangement,...

A model of patent infringement is developed to analyze the relationship between litigation and aspects of the legal environment such as the probability that the patent is found valid, the size of legal fees and their allocation across agents. Potential challengers first decide whether to...

We report the results of the first comparative study of the determinants and effects of patent oppositions in Europe and of re-examinations on corresponding patents issued in the United States. The analysis is based on a dataset consisting of matched EPO and US patents. Our analysis focuses on...

ABSTRACT On 1 January 1995, the Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding; DSU) entered into force. Since 1998, negotiations to review and reform the DSU have taken place (DSU review), however without yielding any result so far....

Disputes occurring in PPP projects pervade three interfacing levels of agreements: internal, downstream, and peripheral. PPP disputes have been free from arbitral dispute resolution and their legal environment is uncertain and deregulated. While project partners appear to have a natural monopoly...