Economic Analysis of Pre-trial Negotiations: A Behavioral Approach
-
Suyog Ravindra Dandekar
and
Angara V. Raja
Abstract
The paper provides a behavioral approach to analysis of pre-trial negotiations. This paper differs from earlier studies in that the most likely outcome forms the basis on which the parties assess their benefits and costs. This is based not on precise calculations of expected values, but on the expectations of the parties which depend on assessment of relative strengths of their case. This is modelled as an outcome of an imperfect cognitive process which is characterized by coherence based reasoning and insensitivities to actual probabilities, and legal discovery. Furthermore, the paper identifies factors which affect bargaining power and how bargaining power affects settlement amounts.
References
Bar-Gill, Oren. 2006. “The Evolution and Persistence of Optimism in Litigation.” Journal of Law, Economics, and Organization 22 (2): 490–507.10.1093/jleo/ewj016Search in Google Scholar
Bebchuk, Lucian A. 1984. “Litigation and Settlement Under Imperfect Information.” The RAND Journal of Economics 15: 404–415.10.2307/2555448Search in Google Scholar
Cooter, Robert D., and Daniel L. Rubinfeld. 1994. “An Economic Model of Legal Discovery.” The Journal of Legal Studies 23: 435–463.10.1086/467930Search in Google Scholar
Cooter, R., and Thomas S. Ulen. 2004. Law and Economics. 4th ed. Boston, Massachusetts: Addison-Wesley Longman, Incorporated.Search in Google Scholar
Cooter, Robert, Stephen Marks, and Robert Mnookin. 1982. “Bargaining in the Shadow of the Law: A Testable Model of Strategic Behavior.” The Journal of Legal Studies 11: 225–251.10.1086/467699Search in Google Scholar
Gould, John P. 1973. “The Economics of Legal Conflicts.” The Journal of Legal Studies 2 (2): 279–300.10.1086/467499Search in Google Scholar
Huang, Peter H., and Ho-Mou Wu. 1992. “Emotional Responses in Litigation.” International Review of Law and Economics 12 (1): 31–44.10.1016/0144-8188(92)90004-BSearch in Google Scholar
Korobkin, Russell, and Chris Guthrie. 1994. “Psychological Barriers to Litigation Settlement: An Experimental Approach.” Michigan Law Review 93 (1): 107–192.10.2307/1289916Search in Google Scholar
Landes, William M. 1971. “An Economic Analysis of the Courts.” Journal of law and economics 14 (1): 61–107.10.1086/466704Search in Google Scholar
Mnookin, Robert H., Scott R. Peppet, and Andrew S. Tulumello. 2000. Beyond Winning: Negotiating to Create Value in Deals and Disputes. Cambridge, Massachusetts: Harvard University Press.Search in Google Scholar
Nalebuff, Barry. 1987. “Credible Pretrial Negotiation.” The RAND Journal of Economics 18 (2): 198–210.10.2307/2555547Search in Google Scholar
Osborne, Martin J. 2004. An Introduction to Game Theory. New York: Oxford University Press.Search in Google Scholar
P’ng, Ivan PL. 1983. “Strategic Behavior in Suit, Settlement, and Trial.” The Bell Journal of Economics 14 (2): 539–550.10.2307/3003655Search in Google Scholar
Posner, Eric A. 2004. “Probability Errors: Some Positive and Normative Implications for Tort and Contract Law.” Supreme Court Economic Review 11: 125–141.10.1086/scer.11.3655327Search in Google Scholar
Posner, Richard A. 1973. “An Economic Approach to Legal Procedure and Judicial Administration.” The Journal of Legal Studies 2 (2): 399–458.10.1086/467503Search in Google Scholar
Reinganum, Jennifer F., and Louise L. Wilde. 1986. “Settlement, Litigation, and the Allocation of Litigation Costs.” RAND Journal of Economics 17 (4): 557–566.10.2307/2555481Search in Google Scholar
Schweizer, Urs. 1989. “Litigation and Settlement Under Two-Sided Incomplete Information.” The Review of Economic Studies 56 (2): 163–177.10.2307/2297455Search in Google Scholar
Shavell, Steven. 1982. “Suit, Settlement, and Trial: A Theoretical Analysis under Alternative Methods for the Allocation of Legal Costs.” The Journal of Legal Studies 11 (1): 55–81.10.1086/467692Search in Google Scholar
Simon, Dan. 2004. “A Third View of the Black Box: Cognitive Coherence in Legal Decision Making.” The University of Chicago Law Review 71 (2): 511–586.Search in Google Scholar
Spier, Kathryn E. 1992. “The Dynamics of Pretrial Negotiation.” The Review of Economic Studies 59 (1): 93–108.10.2307/2297927Search in Google Scholar
Wang, Gyu Ho, Jeong-Yoo Kim, and Jong-Goo Yi. 1994. “Litigation and Pretrial Negotiation Under Incomplete Information.” Journal of Law, Economics, & Organization 10: 187.Search in Google Scholar
©2015 by De Gruyter
Articles in the same Issue
- Frontmatter
- Economic Analysis of Pre-trial Negotiations: A Behavioral Approach
- Professor Hudec’s “Techniques of the Diplomat’s Jurisprudence”: Does It Still Apply?
- Participation of Developing Countries in Dispute Settlement System of World Trade Organisation
- Labour Laws and Informalisation of Employment: Panel Evidences from Indian Formal Manufacturing Sector
- Exploring Aggressive Legalism: Is Now A Good Time to Promote This Approach in Greater Asia?
Articles in the same Issue
- Frontmatter
- Economic Analysis of Pre-trial Negotiations: A Behavioral Approach
- Professor Hudec’s “Techniques of the Diplomat’s Jurisprudence”: Does It Still Apply?
- Participation of Developing Countries in Dispute Settlement System of World Trade Organisation
- Labour Laws and Informalisation of Employment: Panel Evidences from Indian Formal Manufacturing Sector
- Exploring Aggressive Legalism: Is Now A Good Time to Promote This Approach in Greater Asia?
