Lawsuit as a Signaling Game under Asymmetric Information: A Continuum Types Model
AbstractThis paper analyzes the signaling nature of litigation selection under asymmetric information. For the robustness of the analysis, we separate the litigation selection process, where the signaling from the informed party plays the key role, from the actual settlement where a more general bargaining method than the usual 'take-it-or-leave-it' is adopted. With full characterization of a sequential equilibrium, our model provides not only a sound theoretic base, but richer testable hypotheses for the comparative static analyses regarding adjudication rate, plaintiff's win rate, and the relationship between these two key indices, both under the defendant’s and the plaintiff's private information.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number a401.
Length: 24 p.
Date of creation: Dec 2000
Date of revision:
Note: Bibliography: p. 23-24
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asymmetric information; signaling; litigation; settlement; win rate;
Find related papers by JEL classification:
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-10-01 (All new papers)
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