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Suit Versus Settlement When Parties Seek Nonmonetary Judgements

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  • Steven Shavell

Abstract

This article considers situations in which plaintiffs seek nonmonetary judgments, for instance, custody of a child or an injunction. The primary questions of interest concern when parties will be likely to settle and, if so, what the nature of their settlements will be. The answers to these questions are different from what they are when plaintiffs seek purely monetary awards. In that case settlements involve only money payments whereas here they involve as well disposition of the nonmonetary things sought (who obtains custody of a child). Also, as is well known, when plaintiffs seek monetary judgments the parties will be inclined to settle to save litigation costs and reduce risk if they agree about the likelihood of plaintiff success at trial, but here that is not necessarily true. (For example, custody of a child may well be considered vital by each parent, making each unwilling to relinquish the chance of securing custody through trial for any amount in the range of what the other could pay.)

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4012.

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Date of creation: Mar 1992
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Publication status: published as Journal of Legal Studies, January 1993, Vol. 22, No. 1, 1-13.
Handle: RePEc:nbr:nberwo:4012

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  1. William M. Landes, 1974. "An Economic Analysis of the Courts," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 164-214 National Bureau of Economic Research, Inc.
  2. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
  3. Steven Shavell, 1981. "Suit and Settlement vs. Trial: A Theoretical Analysis under Alternative Methods for the Allocation of Legal Costs," NBER Working Papers 0662, National Bureau of Economic Research, Inc.
  4. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 27(3), pages 1067-97, September.
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Cited by:
  1. Vincy Fon & Francesco Parisi & Ben Depoorter, 2005. "Litigation, Judicial Path-Dependence, and Legal Change," European Journal of Law and Economics, Springer, Springer, vol. 20(1), pages 43-56, July.
  2. Philippe Choné & Saïd Souam & Arnold Vialfont, 2012. "Commitments in Antitrust," EconomiX Working Papers 2012-9, University of Paris West - Nanterre la Défense, EconomiX.
  3. Jesse Bull, 2013. "Interrogation and Evidence Fabrication," Working Papers, Florida International University, Department of Economics 1303, Florida International University, Department of Economics.
  4. Oliver Budzinski & Björn A. Kuchinke, 2012. "Deal or No Deal? Consensual Arrangements as an Instrument of European Competition Policy," Review of Economics, Lucius & Lucius, vol. 63(3), pages 265-292.
  5. Choné, Philippe & Souam, Saïd & Vialfont, Arnold, 2014. "On the optimal use of commitment decisions under European competition law," International Review of Law and Economics, Elsevier, Elsevier, vol. 37(C), pages 169-179.

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