IDEAS home Printed from https://ideas.repec.org/a/oup/jleorg/v23y2007i1p57-97.html
   My bibliography  Save this article

Deterrence, Lawsuits, and Litigation Outcomes Under Court Errors

Author

Listed:
  • Claudia M. Landeo
  • Maxim Nikitin
  • Scott Baker

Abstract

This article presents a strategic model of liability and litigation under court errors. Our framework allows for endogenous choice of level of care and endogenous likelihood of filing and disputes. We derive sufficient conditions for a unique universally divine mixed-strategy perfect Bayesian equilibrium under low court errors. In this equilibrium, some defendants choose to be grossly negligent; some cases are filed; and some lawsuits are dropped, some are resolved out of court, and some go to trial. We find that court errors in the size of the award, as well as damage caps and split awards, reduce the likelihood of trial but increase filing and reduce the deterrence effect of punitive damages. We derive conditions under which the adoption of the English rule for allocating legal costs reduces filing. Copyright 2007, Oxford University Press.

Suggested Citation

  • Claudia M. Landeo & Maxim Nikitin & Scott Baker, 2007. "Deterrence, Lawsuits, and Litigation Outcomes Under Court Errors," Journal of Law, Economics, and Organization, Oxford University Press, vol. 23(1), pages 57-97, April.
  • Handle: RePEc:oup:jleorg:v:23:y:2007:i:1:p:57-97
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jleo/ewm003
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marie-Cécile Fagart & Claude Fluet, 2009. "Liability insurance under the negligence rule," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 486-508.
    2. Landeo, Claudia M., 2009. "Cognitive coherence and tort reform," Journal of Economic Psychology, Elsevier, vol. 30(6), pages 898-912, December.
    3. Claudia M. Landeo & Maxim Nikitin, 2015. "Financially-Constrained Lawyers," Working Papers 2015-52, Peruvian Economic Association.
    4. Andrew F. Daughety & Reinganum F. Reinganum, 2014. "Settlement and Trial: Selected Analyses of the Bargaining Environment," Vanderbilt University Department of Economics Working Papers 14-00005, Vanderbilt University Department of Economics.
    5. Koçkesen, Levent & Usman, Murat, 2012. "Litigation and settlement under judicial agency," International Review of Law and Economics, Elsevier, vol. 32(3), pages 300-308.
    6. Boyer, Marcel & Porrini, Donatella, 2011. "The impact of court errors on liability sharing and safety regulation for environmental/industrial accidents," International Review of Law and Economics, Elsevier, vol. 31(1), pages 21-29, March.
    7. Landeo, Claudia & Nikitin, Maxim, 2015. "Effective Labor Relations Laws and Social Welfare," Working Papers 2015-11, University of Alberta, Department of Economics.
    8. Campos, Sergio J. & Cotton, Christopher S. & Li, Cheng, 2015. "Deterrence effects under Twombly: On the costs of increasing pleading standards in litigation," International Review of Law and Economics, Elsevier, vol. 44(C), pages 61-71.
    9. Landeo, Claudia M., 2009. "Tort Reform, Disputes and Belief Formation," MPRA Paper 13453, University Library of Munich, Germany.
    10. Landeo, Claudia & Nikitin, Maxim & Izmalkov, Sergei, 2012. "Playing against an Apparent Opponent: Incentives for Care, Litigation, and Damage Caps under Self-Serving Bias," Working Papers 2012-15, University of Alberta, Department of Economics, revised 01 Oct 2012.
    11. Landeo, Claudia & Nikitin, Maxim, 2015. "Financially-Constrained Lawyers," Working Papers 2015-8, University of Alberta, Department of Economics.
    12. Wohlschlegel, Ansgar, 2014. "The Appeals Process and Incentives to Settle," MPRA Paper 59424, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:23:y:2007:i:1:p:57-97. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: https://academic.oup.com/jleo .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.