Amy Farmer () ( Department of Economics, University of Arkansas, Fayetteville, AR 72701, USA) Paul Pecorino () (Department of Economics, Finance and Legal Studies, University of Alabama, Box 870224, Tuscaloosa, AL 35487, USA)
Additional information is available for the following
registered author(s):
We extend the 1986 signaling model of Reinganum and Wilde by allowing for the possibility of negative expected value (NEV) suits. If filing costs are zero, the equilibrium consistent with the D1 refinement implies that settlement offers face a rejection rate of 100%. If filing costs are positive, an equilibrium with settlement can be restored. In this equilibrium plaintiffs with NEV suits choose not to file, but settlement rates fall below the level in the model without NEV suits. This fall in settlement rates may be substantial. In addition, by making the filing decision endogenous, we are able to derive new insights into the effects of fee shifting in the signaling model.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Volume (Year): 74 (2007) Issue (Month): 2 (October) Pages: 434-447 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: (Laura Razzolini).
Related research
Keywords:
Find related papers by JEL classification: K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior D8 - Microeconomics - - Information, Knowledge, and Uncertainty