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Emotions in Litigation Contests

  • Florian Baumann
  • Tim Friehe

This paper introduces the concept of emotions into the standard litigation contest. Positive (negative) emotions emerge when litigants win (lose) at trial and are dependent in particular on the level of defendant fault. Our findings establish that standard results of litigation contests change significantly when emotions are taken into account. We show that emotions may increase or decrease individual and total equilibrium contest effort, introduce an asymmetry into the contest, and reinforce or weaken a plaintiff’s incentives to bring a suit. In addition, we consider how emotions impact on justice.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-02/cesifo1_wp3351.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3351.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3351
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  1. Parisi, Francesco, 2002. "Rent-seeking through litigation: adversarial and inquisitorial systems compared," International Review of Law and Economics, Elsevier, vol. 22(2), pages 193-216, August.
  2. Huang, Peter H. & Wu, Ho-Mou, 1992. "Emotional responses in litigation," International Review of Law and Economics, Elsevier, vol. 12(1), pages 31-44, March.
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  9. Wärneryd, Karl, 1996. "In Defense of Lawyers. Moral Hazard as an Aid to Cooperation," SSE/EFI Working Paper Series in Economics and Finance 126, Stockholm School of Economics.
  10. Richard Allard, 1988. "Rent-seeking with non-identical players," Public Choice, Springer, vol. 57(1), pages 3-14, April.
  11. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, March.
  12. Hirshleifer, Jack & Osborne, Evan, 2001. " Truth, Effort, and the Legal Battle," Public Choice, Springer, vol. 108(1-2), pages 169-95, July.
  13. Bosman, R.A.J & van Winden, Frans A.A.M., 2006. "Global Risk, Investment and Emotions," CEPR Discussion Papers 5451, C.E.P.R. Discussion Papers.
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  16. Ernesto Reuben & Frans van Winden, 2006. "Reciprocity and Emotions when Reciprocators Know each other," CESifo Working Paper Series 1674, CESifo Group Munich.
  17. Astrid Hopfensitz & Ernesto Reuben, 2005. "The Importance of Emotions for the Effectiveness of Social Punishment," Tinbergen Institute Discussion Papers 05-075/1, Tinbergen Institute, revised 28 Mar 2006.
  18. Christian Ewerhart, 2010. "Rent-seeking contests with independent private values," IEW - Working Papers 490, Institute for Empirical Research in Economics - University of Zurich.
  19. Reuben, Ernesto & van Winden, Frans, 2008. "Social ties and coordination on negative reciprocity: The role of affect," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 34-53, February.
  20. Ronald Bosman & Frans van Winden, 2002. "Emotional Hazard in a Power-to-take Experiment," Economic Journal, Royal Economic Society, vol. 112(476), pages 147-169, January.
  21. Babcock, Linda & Pogarsky, Greg, 1999. "Damage Caps and Settlement: A Behavioral Approach," The Journal of Legal Studies, University of Chicago Press, vol. 28(2), pages 341-70, June.
  22. Stanley, Linda R & Coursey, Don L, 1990. "Empirical Evidence on the Selection Hypothesis and the Decision to Litigate or Settle," The Journal of Legal Studies, University of Chicago Press, vol. 19(1), pages 145-72, January.
  23. Matthias Kräkel, 2008. "Emotions and the optimality of uneven tournaments," Review of Managerial Science, Springer, vol. 2(1), pages 61-79, March.
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  25. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  26. Kooreman, Peter & Schoonbeek, Lambert, 1997. "The specification of the probability functions in Tullock's rent-seeking contest," Economics Letters, Elsevier, vol. 56(1), pages 59-61, September.
  27. Kragl, Jenny & Schmid, Julia, 2009. "The impact of envy on relational employment contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 766-779, November.
  28. Andrew F. Daughety & Jennifer F. Reinganum, 2002. "Informational Externalities in Settlement Bargaining: Confidentiality and Correlated Culpability," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 587-604, Winter.
  29. Farmer, Amy & Tiefenthaler, Jill, 2001. "Conflict in divorce disputes: the determinants of pretrial settlement," International Review of Law and Economics, Elsevier, vol. 21(2), pages 157-180, June.
  30. Tim Friehe, 2011. "On being asset-constrained in litigation contests," Public Choice, Springer, vol. 147(3), pages 277-284, June.
  31. Kräkel, Matthias, 2008. "Emotions in tournaments," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 204-214, July.
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