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An experiment with two-way offers into court: restoring the balance in pre-trial negotiation

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Abstract

Defendant offers into court is common procedural device aimed at increasing the probability that pre-trial negotiations will lead to out of court settlement. Both in the UK following the Woolf Report (1996) and the Cullen Report (1995) and in the USA, the idea of extending the arrangement to plaintiff offers into court has been suggested. This paper presents an extension of the theoretical work by Chung (1996) on defendant offers into court under the American rule to cover the English rule and to extend to two-way offers into court. It also reports on experiments conducted to measure the effect of moving to two-way offers into court. The results suggest no impact on the propensity to settle and a statistically significant but empirically modest movement of settlement in favour of the plaintiff.

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  • Brian G Main & Andrew Park, 1998. "An experiment with two-way offers into court: restoring the balance in pre-trial negotiation," ESE Discussion Papers 28, Edinburgh School of Economics, University of Edinburgh.
  • Handle: RePEc:edn:esedps:28
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    File URL: http://www.econ.ed.ac.uk/papers/id28_esedps.pdf
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    1. Chung, Tai-Yeong, 1996. "Settlement of Litigation under Rule 68: An Economic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 261-286, January.
    2. Anderson, David A, 1994. "Improving Settlement Devices: Rule 68 and Beyond," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 225-246, January.
    3. William M. Landes, 1974. "An Economic Analysis of the Courts," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 164-214 National Bureau of Economic Research, Inc.
    4. Coursey, Don L. & Stanley, Linda R., 1988. "Pretrial bargaining behavior within the shadow of the law: Theory and experimental evidence," International Review of Law and Economics, Elsevier, vol. 8(2), pages 161-179, December.
    5. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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