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Managerial Judges: An Economic Analysis of the Judicial Management of Legal Discovery

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  • Joel L. Schrag
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    Abstract

    I analyze the effect of procedural rules that permit judges to limit pretrial discovery. In the presence of asymmetric information, a litigant may forgo settlement before discovery if his opponent interprets a serious offer as a sign that her discovery is likely to uncover useful evidence, leading her to invest more in discovery. Furthermore, a litigant may forgo settlement in order to strengthen his or her threat of future discovery. I show that by limiting pretrial discovery, the judge can simultaneously increase the probability of early settlement and reduce expected litigation costs, without reducing potential injurers' incentives to take care.

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    Bibliographic Info

    Article provided by The RAND Corporation in its journal RAND Journal of Economics.

    Volume (Year): 30 (1999)
    Issue (Month): 2 (Summer)
    Pages: 305-323

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    Handle: RePEc:rje:randje:v:30:y:1999:i:summer:p:305-323

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    Cited by:
    1. Koçkesen, Levent & Usman, Murat, 2012. "Litigation and settlement under judicial agency," International Review of Law and Economics, Elsevier, Elsevier, vol. 32(3), pages 300-308.
    2. Philippe Choné & Laurent Linnemer, 2008. "Optimal Litigation Strategies with Signaling and Screening," CESifo Working Paper Series, CESifo Group Munich 2334, CESifo Group Munich.
    3. Choné, Philippe & Linnemer, Laurent, 2010. "Optimal litigation strategies with observable case preparation," Games and Economic Behavior, Elsevier, Elsevier, vol. 70(2), pages 271-288, November.
    4. Dominique Demougin & Claude Fluet, 2006. "Rules of Proof, Courts, and Incentives," Cahiers de recherche, CIRPEE 0633, CIRPEE.
    5. Baumann, Florian & Friehe, Tim, 2014. "On discovery, restricting lawyers, and the settlement rate," DICE Discussion Papers, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) 155, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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