Class Action Suits in Domestic Production, Smuggling, and the Non-Equivalence Between Tariffs and Quotas
Class action suits are a legal device by which similarly injured individuals can collectively obtain compensation through the justice system. Damage averaging occurs when the compensation awarded by the court to individual members is partly or completely determined by the average damage of the class. This paper examines two dimensions of the impact of damage averaging on class action suits. First, when opting out is permitted, a semi-separating (adverse selection) equilibrium may exist in the presence of pretrial settlement offers to individual suit plaintiffs and/or to class action suit plaintiffs if the degree of damage averaging satisfies certain conditions. Second, the key role of damage averaging in influencing the identity of the individual that will initiate the class action suit is illustrated in a waiting game. If there is complete averaging, the individual with the lowest damage will initiate the class action suit. On the other hand, if there is no damage averaging, either the one with the highest or the one with the lowest damage will do so.
|Date of creation:||1995|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (418) 656-5122
Fax: (418) 656-2707
Web page: http://www.ecn.ulaval.caEmail:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:lvl:laeccr:9527. 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: (Johanne Perron)
If references are entirely missing, you can add them using this form.