Deterrence, Lawsuits, and Litigation Outcomes Under Court Errors
AbstractThis article presents a strategic model of liability and litigation under court errors. Our framework allows for endogenous choice of level of care and endogenous likelihood of filing and disputes. We derive sufficient conditions for a unique universally divine mixed-strategy perfect Bayesian equilibrium under low court errors. In this equilibrium, some defendants choose to be grossly negligent; some cases are filed; and some lawsuits are dropped, some are resolved out of court, and some go to trial. We find that court errors in the size of the award, as well as damage caps and split awards, reduce the likelihood of trial but increase filing and reduce the deterrence effect of punitive damages. We derive conditions under which the adoption of the English rule for allocating legal costs reduces filing. Copyright 2007, Oxford University Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Oxford University Press in its journal The Journal of Law, Economics, and Organization.
Volume (Year): 23 (2007)
Issue (Month): 1 (April)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://jleo.oupjournals.org/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Levent Koçkesen & Murat Usman, 2011.
"Litigation and Settlement under Judicial Agency,"
KoÃ§ University-TUSIAD Economic Research Forum Working Papers
1121, Koc University-TUSIAD Economic Research Forum.
- Landeo, Claudia & Nikitin, Maxim & Izmalkov, Sergei, 2012.
"Playing against an Apparent Opponent: Incentives for Care, Litigation, and Damage Caps under Self-Serving Bias,"
2012-9, University of Alberta, Department of Economics.
- Landeo, Claudia & Nikitin, Maxim & Izmalkov, Sergei, 2012. "Playing against an Apparent Opponent: Incentives for Care, Litigation, and Damage Caps under Self-Serving Bias," Working Papers 2012-15, University of Alberta, Department of Economics, revised 01 Oct 2012.
- Landeo, Claudia, 2009.
"Tort Reform, Disputes and Belief Formation,"
2009-12, University of Alberta, Department of Economics.
- Boyer, Marcel & Porrini, Donatella, 2011.
"The impact of court errors on liability sharing and safety regulation for environmental/industrial accidents,"
International Review of Law and Economics,
Elsevier, vol. 31(1), pages 21-29, March.
- Marcel Boyer & Donatella Porrini, 2010. "The Impact of Court Errors on Liability Sharing and Safety Regulation for Environmental/Industrial Accidents," CIRANO Working Papers 2010s-48, CIRANO.
- Landeo, Claudia M., 2009. "Cognitive coherence and tort reform," Journal of Economic Psychology, Elsevier, vol. 30(6), pages 898-912, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.