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A Note on Trial Delay and Social Welfare: The Impact of Multiple Equilibria

Author

Listed:
  • Friehe Tim

    (University of Marburg, Public Economics Group, Am Plan 2, 35037 Marburg, Germany)

  • Miceli Thomas J.

    (Department of Economics, University of Connecticut, 309 Oak Hall,365 Fairfield Way, Storrs, CT 06269-1063, USA)

Abstract

Greater trial delay is commonly associated with decreasing demand for trials, thereby bringing about an equilibrium for a given trial capacity. This note highlights that – in contrast to this premise – trial delay may in fact increase trial demand. Such an outcome is established for a scenario in which the number of cases is endogenous based on the deterrence effect of lawsuits. That trial demand may increase with longer delay makes multiple stable equilibria possible. This reality has important policy implications, which are discussed.

Suggested Citation

  • Friehe Tim & Miceli Thomas J., 2017. "A Note on Trial Delay and Social Welfare: The Impact of Multiple Equilibria," Review of Law & Economics, De Gruyter, vol. 13(1), pages 1-15, March.
    • Handle: RePEc:bpj:rlecon:v:13:y:2017:i:1:p:15:n:7
    DOI: 10.1515/rle-2015-0044
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    References listed on IDEAS

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    3. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    4. Di Vita, Giuseppe, 2010. "Production of laws and delays in court decisions," International Review of Law and Economics, Elsevier, vol. 30(3), pages 276-281, September.
    5. Chappe, Nathalie & Obidzinski, Marie, 2014. "The impact of the number of courts on the demand for trials," International Review of Law and Economics, Elsevier, vol. 37(C), pages 121-125.
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    7. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," The Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-450, June.
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    More about this item

    Keywords

    trial; delay; care; multiple equilibria;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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