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Toward a Taxonomy of Disputes: New Evidence through the Prism of the Priest/Klein Model


  • Siegelman, Peter
  • Waldfogel, Joel


The Priest/Klein model predicts both trial rates and plaintiff win rates as functions of three structural parameters: the decision standard, parties' uncertainty in estimating case quality, and the degree of stake asymmetry across parties. Previous tests of the model are unsatisfactory because most have concentrated on its prediction of a 50 percent win rate, which only obtains as a limiting case. We gather independent evidence that describes the model's three parameters and compare it with estimates from a structural model that simultaneously estimates both trial and win rates. The model fits the data for four of our six case types. A four-parameter model, in which plaintiffs face greater uncertainty than defendants, can explain the two anomalous case types. Copyright 1999 by the University of Chicago.

Suggested Citation

  • Siegelman, Peter & Waldfogel, Joel, 1999. "Toward a Taxonomy of Disputes: New Evidence through the Prism of the Priest/Klein Model," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 101-130, January.
  • Handle: RePEc:ucp:jlstud:v:28:y:1999:i:1:p:101-30

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    References listed on IDEAS

    1. Steven Shavell, 1981. "The Social versus the Private Incentive to Bring Suit in a Costly Legal System," NBER Working Papers 0741, National Bureau of Economic Research, Inc.
    2. Hylton, Keith N., 1990. "The influence of litigation costs on deterrence under strict liability and under negligence," International Review of Law and Economics, Elsevier, vol. 10(2), pages 161-171, September.
    3. Png, I. P. L., 1987. "Litigation, liability, and incentives for care," Journal of Public Economics, Elsevier, vol. 34(1), pages 61-85, October.
    4. 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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    Cited by:

    1. Freyens, Benoit Pierre & Gong, Xiaodong, 2017. "Judicial decision making under changing legal standards: The case of dismissal arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 108-126.
    2. De Mot, Jef & Depoorter, Ben, 2010. "Tort law and probabilistic litigation: How to apply multipliers to address the problem of negative value suits," International Review of Law and Economics, Elsevier, vol. 30(3), pages 236-243, September.
    3. Poitras, Marc & Frasca, Ralph, 2011. "A unified model of settlement and trial expenditures: The Priest√ĘKlein model extended," International Review of Law and Economics, Elsevier, vol. 31(3), pages 188-195, September.
    4. Zhou, Jun, 2010. "Jackpot Justice: The Value of Inefficient Litigation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 346, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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