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Spite in Litigation

Author

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  • Wladislaw Mill

  • Jonathan Staebler

Abstract

This paper studies how litigation and settlement behavior is affected by agents motivated by spiteful preferences under the American and the English fee-shifting rule. We conduct an experiment and find that litigation expenditures and settlement requests are higher for more spiteful participants. The relative increase in litigation expenditures due to spite is more pronounced under the American fee-shifting rule. We further find that the expected payoff for more spiteful societies is lower than for less spiteful societies. This effect is particularly pronounced for low-merit cases under the English rule compared to a constant cost under the American rule.

Suggested Citation

  • Wladislaw Mill & Jonathan Staebler, 2023. "Spite in Litigation," CRC TR 224 Discussion Paper Series crctr224_2023_401, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2023_401
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp401
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    Cited by:

    1. Kirchkamp, Oliver & Liu, Shulin & Mill, Wladislaw & Wang, Xiangyu, 2025. "Spiteful bidding in first-price all-pay auctions," Economics Letters, Elsevier, vol. 254(C).

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    Keywords

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    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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