Damage Caps and Settlement: A Behavioral Approach
AbstractSince 1970, at least 30 states have enacted legislation capping the damages plaintiffs can recover in a lawsuit. Guided by previous research on suit and settlement, we outline a simple framework for examining the effects of a cap on litigant judgments and the pretrial settlement rate. We then introduce several refinements to the simple framework that are based on findings from behavioral economics and psychology. In particular, we recognize litigants may possess "role-specific biases" in information processing and may be subject to nonpecuniary influences during pre-trial bargaining. Finally, the paper presents experimental evidence for the effects of a damage cap on litigants' judgments and the settlement rate. The results show that behavioral and psychological theories can greatly expand the explanatory power of models that depict the pretrial bargaining environment. Copyright 1999 by the University of Chicago.
Download InfoTo 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.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Legal Studies.
Volume (Year): 28 (1999)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JLS/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Landeo, Claudia, 2009.
"Tort Reform, Disputes and Belief Formation,"
2009-12, University of Alberta, Department of Economics.
- Avraham, Ronen & Bustos, Álvaro, 2010.
"The unexpected effects of caps on non-economic damages,"
International Review of Law and Economics,
Elsevier, vol. 30(4), pages 291-305, December.
- Ãlvaro Bustos & Ronen Avraham., 2008. "The Unexpected Effects of Caps on Non-Economic Damages," Documentos de Trabajo 353, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Landeo, Claudia M., 2009. "Cognitive coherence and tort reform," Journal of Economic Psychology, Elsevier, vol. 30(6), pages 898-912, December.
- Florian Baumann & Tim Friehe, 2012.
"Emotions in litigation contests,"
Economics of Governance,
Springer, vol. 13(3), pages 195-215, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.