Negative Expected Value Suits
AbstractWhen the cost of a suit exceeds the expected judgment, will a potential plaintiff be able to extract any amount in settlement from the defendant? If so, what is the source of the plaintiff's ability to extract a settlement? This essay discusses existing theories as to why (and when) plaintiffs with negative-expected-value (NEV) suits can extract a settlement amount from the defendant. Among the theories discussed are ones that focus on informational issues and ones that focus on the way in which the parties' litigation costs are expected to be distributed over time.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6474.
Date of creation: Mar 1998
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