IDEAS home Printed from
   My bibliography  Save this paper

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


  • Sieg, Holger


Games with asymmetric information play a prominent role in the theoretical literature of malpractice disputes. The common modeling framework in many papers is a game in extensive form which consists of two stages. In the first stage, one agent makes a settlement demand, and the other agent accepts or rejects the demand. If the demand is accepted, the case is settled out of court. Otherwise the case is taken to court and decided by a jury. This article develops a strategy for estimating such a model and focuses on reconciling the theoretical literature with observed regularities in malpractice data. Estimation of these types of models is complicated by the fact that key variables are (partially) unobserved and must therefore be treated as latent variables. The estimation strategy requires a complete specification of the bargaining model, including distributional assumptions of the latent variables. The parameters of the model are estimated using a simulated method of moments (SMM) estimator. The results of this study suggest that a simple bargaining model with private information can explain many of the qualitative and quantitative regularities observed in the data.

Suggested Citation

  • Sieg, Holger, 1999. "Estimating a Bargaining Model with Asymmetric Information: Evidence from Medical Malpractice Disputes," Working Papers 99-02, Duke University, Department of Economics.
  • Handle: RePEc:duk:dukeec:99-02

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:duk:dukeec:99-02. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics Webmaster). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.