We explore informational externalities that arise when multiple plaintiffs are harmed by the behavior or product of a single defendant. An early plaintiff is likely to raise the awareness of a later plaintiff, and the later plaintiff will be able to learn something about the defendant's culpability by observing the disposition of the early suit: the presence of an early plaintiff provides a benefit to a later plaintiff. The presence of the later plaintiff also confers a potential benefit on the early plaintiff: the early plaintiff has the opportunity to charge the defendant for controlling the flow of information (e.g., through confidential settlement).
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Volume (Year): 33 (2002) Issue (Month): 4 (Winter) Pages: 587-604 Download reference. The following formats are available: HTML
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repec:bep:thetop:v:4:y:2004:i:1:p:1117-1117 is not listed on IDEAS
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Andrew F. Daughety & Jennifer F. Reinganum, 2003.
"Secrecy and Safety,"
Working Papers
0317, Department of Economics, Vanderbilt University, revised Sep 2003.
[Downloadable!]
Other versions:
Andrew F. Daughety & Jennifer F. Reinganum, 2005.
"Secrecy and Safety,"
American Economic Review,
American Economic Association, vol. 95(4), pages 1074-1091, September.
[Downloadable!]
Oliver Gürtler & Matthias Kräkel, .
"Double-Sided Moral Hazard, Efficiency Wages and Litigation,"
Discussion Papers
214, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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