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Litigation and the Product Rule: A Rent Seeking Approach

Author

Listed:
  • Jef De Mot

    (University of Ghent)

  • Thomas J. Miceli

    (University of Connecticut)

Abstract

This paper examines the suppression of the product rule in litigation from a rent seeking perspective. We show that there are some important arguments in favor of not applying the product rule. First, only when the product rule is suppressed is the plaintiff's equilibrium probability of winning equal to the product of the inherent quality of the several issues at stake. The probability of winning is always lower when the product rule is used, and this is especially so for relatively strong cases. Second, for many of the weakest cases, the expected value of the plaintiff is larger when the product rule is used. Third, for relatively strong cases, the litigation expenditures are typically larger when the product rule is used. This further decreases the plaintiff's expected value for strong cases.

Suggested Citation

  • Jef De Mot & Thomas J. Miceli, 2015. "Litigation and the Product Rule: A Rent Seeking Approach," Working papers 2015-13, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2015-13
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    More about this item

    Keywords

    product rule; litigation costs; rent seeking;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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