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Estimating a Bargaining Model with Asymmetric Information: Evidence from Medical Malpractice Disputes

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  • Holger Sieg

Abstract

This article uses a unique data set on medical malpractice disputes in Florida to estimate the parameters of a bargaining game with asymmetric information. The main findings of the article suggest that the bargaining game can replicate most of the qualitative and quantitative features of the data. The article also simulates alternative policy regimes to quantify the effects of possible tort reforms, such as imposing limits on contingency fees and caps on jury awards.

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  • Holger Sieg, 2000. "Estimating a Bargaining Model with Asymmetric Information: Evidence from Medical Malpractice Disputes," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 1006-1021, October.
    • Handle: RePEc:ucp:jpolec:v:108:y:2000:i:5:p:1006-1021
    DOI: 10.1086/317677
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    References listed on IDEAS

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    1. Daniel F. Rubinfeld & Suzanne Scotchmer, 1993. "Contingent Fees for Attorneys: An Economic Analysis," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 343-356, Autumn.
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    7. Fournier, Gary M & Zuehlke, Thomas W, 1989. "Litigation and Settlement: An Empirical Approach," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 189-195, May.
    8. Henry S. Farber & Michelle J. White, 1991. "Medical Malpractice: An Empirical Examination of the Litigation Process," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 199-217, Summer.
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    Cited by:

    1. Joshua S. Gans & Andrew Leigh, 2012. "Bargaining Over Labour: Do Patients Have Any Power?," The Economic Record, The Economic Society of Australia, vol. 88(281), pages 182-194, June.
    2. Avraham, Ronen & Bustos, Álvaro, 2010. "The unexpected effects of caps on non-economic damages," International Review of Law and Economics, Elsevier, vol. 30(4), pages 291-305, December.
    3. David S. Kaplan & Joyce Sadka & Jorge Luis Silva‐Mendez, 2008. "Litigation and Settlement: New Evidence from Labor Courts in Mexico," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 5(2), pages 309-350, June.
    4. Helland, Eric & Seabury, Seth A., 2015. "Tort reform and physician labor supply: A review of the evidence," International Review of Law and Economics, Elsevier, vol. 42(C), pages 192-202.
    5. David P Byrne & Leslie A Martin & Jia Sheen Nah, 2022. "Price Discrimination by Negotiation: a Field Experiment in Retail Electricity [“Redistribution through Markets,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(4), pages 2499-2537.
    6. Dindaroglu, Burak & Ertac, Seda, 2024. "An empirical study of sequential offer bargaining during the Festival of Sacrifice," Journal of Economic Psychology, Elsevier, vol. 101(C).
    7. Poitras, Marc & Frasca, Ralph, 2011. "A unified model of settlement and trial expenditures: The PriestâKlein model extended," International Review of Law and Economics, Elsevier, vol. 31(3), pages 188-195, September.
    8. Hylton, Keith N., 2002. "An asymmetric-information model of litigation," International Review of Law and Economics, Elsevier, vol. 22(2), pages 153-175, August.
    9. Bradley J Larsen, 2021. "The Efficiency of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 851-882.
    10. Antonio Merlo & Xun Tang, 2011. "Identification and Estimation of Stochastic Bargaining Models, Fourth Version," PIER Working Paper Archive 11-035, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 19 Oct 2011.
    11. Yasutora Watanabe, 2005. "Learning and Bargaining in Dispute Resolution: Theory and Evidence from Medical Malpractice Litigation," 2005 Meeting Papers 440, Society for Economic Dynamics.
    12. Merlo, Antonio & Tang, Xun, 2015. "Bargaining with Optimism: A Structural Analysis of Medical Malpractice Litigation," Working Papers 15-005, Rice University, Department of Economics.
    13. David P Byrne & Leslie A Martin & Jia Sheen Nah, 2023. "Price Discrimination by Negotiation: a Field Experiment in Retail Electricity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(4), pages 2499-2537.
    14. Antonio Merlo & Xun Tang, 2010. "Identification and Estimation of Stochastic Bargaining Models, Third Version," PIER Working Paper Archive 11-008, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 11 Mar 2011.
    15. 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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