The British American Rules: An experimental examination of pre-trial bargaining within the shadow of the law
A commonly held view is that the frequency and value of pre-trial settlements in civil disputes are greatly influenced by the cost allocation regime that is in place if the case goes to trial. There is a large and growing theoretical literature on this subject but almost no empirical evidence. This is due simply to the scarcity of relevant data owing to the confidentiality generally associated with such matters. However, the area is an ideal one to analyse experimentally. In this paper we consider the effect of the British and American rules for cost allocation using such an experimental methodology. We find that the two rules produce no difference in the frequency of re-trial settlements but that the British rule produces higher settlements (pro-pursuer) if the probability of the pursuer winning is large.
|Date of creation:||Jan 1999|
|Date of revision:|
|Contact details of provider:|| Postal: 31 Buccleuch Place, EH8 9JT, Edinburgh|
Web page: http://www.econ.ed.ac.uk/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hoffman, Elizabeth & Spitzer, Matthew L, 1982.
"The Coase Theorem: Some Experimental Tests,"
Journal of Law and Economics,
University of Chicago Press, vol. 25(1), pages 73-98, April.
- Harrison, Glenn W & McKee, Michael, 1985. "Experimental Evaluation of the Coase Theorem," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 653-70, October.
- Harrison, Glenn W., 1986. "An experimental test for risk aversion," Economics Letters, Elsevier, vol. 21(1), pages 7-11.
- 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.
- I.P.L. P'ng, 1983. "Strategic Behavior in Suit, Settlement, and Trial," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 539-550, Autumn.
- George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
- Snyder, Edward A & Hughes, James W, 1990. "The English Rule for Allocating Legal Costs: Evidence Confronts Theory," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(2), pages 345-80, Fall.
- Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
- Henry S. Farber & Harry C. Katz, 1979. "Interest Arbitration, Outcomes, and the Incentive to Bargain," ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
- William M. Landes, 1974.
"An Economic Analysis of the Courts,"
in: Essays in the Economics of Crime and Punishment, pages 164-214
National Bureau of Economic Research, Inc.
- 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.
- Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
When requesting a correction, please mention this item's handle: RePEc:edn:esedps:30. 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: (Gina Reddie)
If references are entirely missing, you can add them using this form.