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The Welfare Implications of Costly Litigation for the Level of Liability

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  • Polinsky, A Mitchell
  • Rubinfeld, Daniel L

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  • Polinsky, A Mitchell & Rubinfeld, Daniel L, 1988. "The Welfare Implications of Costly Litigation for the Level of Liability," The Journal of Legal Studies, University of Chicago Press, vol. 17(1), pages 151-164, January.
  • Handle: RePEc:ucp:jlstud:v:17:y:1988:i:1:p:151-64
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    File URL: http://dx.doi.org/10.1086/468125
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Arturo Bris & Ivo Welch & Ning Zhu, 2006. "The Costs of Bankruptcy: Chapter 7 Liquidation versus Chapter 11 Reorganization," Journal of Finance, American Finance Association, vol. 61(3), pages 1253-1303, June.
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    8. Berkovitch, Elazar & Kim, E Han, 1990. " Financial Contracting and Leverage Induced Over- and Under-Investment Incentives," Journal of Finance, American Finance Association, vol. 45(3), pages 765-794, July.
    9. Kornhauser, Lewis A, 1983. "Reliance, Reputation, and Breach of Contract," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 691-706, October.
    10. Weiss, Lawrence A., 1990. "Bankruptcy resolution: Direct costs and violation of priority of claims," Journal of Financial Economics, Elsevier, vol. 27(2), pages 285-314, October.
    11. Kalyan Chatterjee & William Samuelson, 1983. "Bargaining under Incomplete Information," Operations Research, INFORMS, pages 835-851.
    12. French, Kenneth R & McCormick, Robert E, 1984. "Sealed Bids, Sunk Costs, and the Process of Competition," The Journal of Business, University of Chicago Press, vol. 57(4), pages 417-441, October.
    13. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
    14. Altman, Edward I, 1984. " A Further Empirical Investigation of the Bankruptcy Cost Question," Journal of Finance, American Finance Association, vol. 39(4), pages 1067-1089, September.
    15. Oliver Hart, 2001. "Norms and the Theory of the Firm," Harvard Institute of Economic Research Working Papers 1923, Harvard - Institute of Economic Research.
    16. Opler, Tim C & Titman, Sheridan, 1994. " Financial Distress and Corporate Performance," Journal of Finance, American Finance Association, vol. 49(3), pages 1015-1040, July.
    17. Bhagat, Sanjai & Brickley, James A. & Coles, Jeffrey L., 1994. "The costs of inefficient bargaining and financial distress *1: Evidence from corporate lawsuits," Journal of Financial Economics, Elsevier, vol. 35(2), pages 221-247, April.
    18. Kenneth Ayotte & Hayong Yun, "undated". "Matching Bankruptcy Laws to Legal Environments," American Law & Economics Association Annual Meetings 1018, American Law & Economics Association.
    19. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    20. John Armour & Audrey Hsu & Adrian Walters, 2006. "The costs and benefits of secured creditor control in bankruptcy: Evidence from the UK," Working Papers wp332, Centre for Business Research, University of Cambridge.
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    Cited by:

    1. Miceli, Thomas J. & Stone, Michael P., 2014. "“Piggyback” lawsuits and deterrence: Can frivolous litigation improve welfare?," International Review of Law and Economics, Elsevier, vol. 39(C), pages 49-57.
    2. Polinsky, A. Mitchell & Shavell, Steven, 2014. "Costly litigation and optimal damages," International Review of Law and Economics, Elsevier, pages 86-89.
    3. Miceli, Thomas J. & Segerson, Kathleen, 2003. "A note on optimal care by wealth-constrained injurers," International Review of Law and Economics, Elsevier, pages 273-284.
    4. Liu, Zhiyong & Avraham, Ronen, 2012. "Ex ante versus ex post expectation damages," International Review of Law and Economics, Elsevier, vol. 32(4), pages 339-355.
    5. Florian Baumann & Tim Friehe, 2015. "Optimal Damages Multipliers in Oligopolistic Markets," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(4), pages 622-640, December.
    6. Albert Choi & Chris William Sanchirico, 2004. "Should Plaintiffs Win What Defendants Lose? Litigation Stakes, Litigation Effort, and the Benefits of Decoupling," The Journal of Legal Studies, University of Chicago Press, pages 323-354.
    7. Bartsch, Elga, 1995. "Environmental liability, imperfect information and multidimensional pollution control," Kiel Working Papers 690, Kiel Institute for the World Economy (IfW).
    8. Clements, Matthew T., 2003. "Precautionary incentives for privately informed victims," International Review of Law and Economics, Elsevier, vol. 23(3), pages 237-251, September.
    9. Shavell, Steven, 1999. "The level of litigation: private versus social optimality of suit and of settlement," International Review of Law and Economics, Elsevier, vol. 19(1), pages 99-115, March.
    10. Chris Sanchirico & George Triantis, "undated". "Evidence Arbitrage: The Fabrication of Evidence and the Verifiability of Contract Performance," Scholarship at Penn Law upenn_wps-1005, University of Pennsylvania Law School.
    11. Albert Choi & Chris William Sanchirico, 2004. "Should Plaintiffs Win What Defendants Lose? Litigation Stakes, Litigation Effort, and the Benefits of Decoupling," The Journal of Legal Studies, University of Chicago Press, pages 323-354.
    12. Dari-Mattiacci Giuseppe, 2006. "On the Optimal Scope of Negligence," Review of Law & Economics, De Gruyter, vol. 1(3), pages 331-364, January.
    13. Miceli Thomas J., 2008. "A Note on the Social versus Private Value of Suits when Care is Bilateral," Review of Law & Economics, De Gruyter, vol. 4(1), pages 373-382, October.
    14. Hylton Keith N, 2006. "Property Rules and Liability Rules, Once Again," Review of Law & Economics, De Gruyter, vol. 2(2), pages 137-191, September.
    15. Innes, Robert, 1999. "Optimal liability with stochastic harms, judgement-proof injurers, and asymmetric information1," International Review of Law and Economics, Elsevier, vol. 19(2), pages 181-203, June.
    16. Schwab, Christian & Tang, Hin-Yue Benny, 2011. "Die Steuerungswirkungen unterschiedlicher Prozesskostenregelungen: Ein Überblick zum Stand von Theorie und Empirie
      [The economic effects of alternative fee shifting rules: A review of the theoretic
      ," MPRA Paper 32746, University Library of Munich, Germany.
    17. Claudia M. Landeo & Maxim Nikitin, 2006. "Split-Award Tort Reform, Firm's Level of Care, and Litigation Outcomes," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, pages 571-600.
    18. Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.
    19. repec:eee:irlaec:v:52:y:2017:i:c:p:44-57 is not listed on IDEAS
    20. Innes, Robert, 2004. "Enforcement costs, optimal sanctions, and the choice between ex-post liability and ex-ante regulation," International Review of Law and Economics, Elsevier, vol. 24(1), pages 29-48, March.
    21. Beckner, Clinton III & Katz, Avery, 1995. "The incentive effects of litigation fee shifting when legal standards are uncertain," International Review of Law and Economics, Elsevier, vol. 15(2), pages 205-224, June.
    22. Friehe, Tim, 2009. "Screening accident victims," International Review of Law and Economics, Elsevier, vol. 29(3), pages 272-280, September.
    23. Peter Van Wijck & Ben Van Velthoven, 2000. "An Economic Analysis of the American and the Continental Rule for Allocating Legal Costs," European Journal of Law and Economics, Springer, vol. 9(2), pages 115-125, March.
    24. Oren Bar-Gill & Lucian A. Bebchuk, 2007. "Consent and Exchange," NBER Working Papers 13267, National Bureau of Economic Research, Inc.

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