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The impact of defendant offers into court on negotiation in the shadow of the law: experimental evidence

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A common procedural arrangement that is thought to influence the pre-trial settlement of civil disputes is one which allows the defendant to make an offer to settle which if it is rejected by the plaintiff and not subsequently bettered by the judge's trial decision will affect the division of the legal costs between the two sides. Operating under Federal Rule 68 in the USA, as "offers to settle" or "payments into court" in England and Wales, and as "tenders" in Scotland, these devices are generally assumed to encourage settlement. This paper extends the theoretical model of Miller (1986) and Chung (1996a) to the British context, and presents some experimental evidence on how agents react to such arrangements. The rule seems to have little empirical impact on the propensity to settle and to favour the defendant in terms of the level of settlement.

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  • Brian G Main & Andrew Park, 1999. "The impact of defendant offers into court on negotiation in the shadow of the law: experimental evidence," Edinburgh School of Economics Discussion Paper Series 29, Edinburgh School of Economics, University of Edinburgh.
    • Handle: RePEc:edn:esedps:29
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    1. 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.
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    More about this item

    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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