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The Success and Survival of Cautious Optimism - An Evolutionary Analysis of Pre-Trial Settlement Negotiations


  • Bar-Gill, O.


The systematic optimism of lawyers is even more of a puzzle. A lawyer suffering from a persistent problem of inaccurate assessments will surely be driven out of the market. The present analysis challenges these conventional allegations. Using evolutionary game theory, we demonstrate that `market pressure`, or an alternative imitation process, favor cautiously optimistic litigants. The pre-trial environment, inspired by the legal system, fosters optimism through the mechanism of settlement negotiations. We study a dynamic model, which allows us to derive the evolutionary stable level of optimism, under different legal regimes. Our analysis emphasizes the major role of the prevailing legal rule in determining the equilibrium level of optimism. By doing so we hope to shed new light on the ongoing debate regarding the effects of legal rules on the probability of settlement.

Suggested Citation

  • Bar-Gill, O., 2000. "The Success and Survival of Cautious Optimism - An Evolutionary Analysis of Pre-Trial Settlement Negotiations," Papers 00-15, Tel Aviv.
  • Handle: RePEc:fth:teavfo:00-15

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    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process


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