Abstract

http://ssrn.com/abstract=1950196
 
 

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A Contest Model of Separate Action versus Class Action Litigation


Kathryn E. Spier


Harvard University - Law School - Faculty; National Bureau of Economic Research (NBER)

David Rosenberg


Harvard Law School

October 14, 2011

Forthcoming, Journal of Legal Analysis
Harvard Public Law Working Paper No. 11-28

Abstract:     
We formally demonstrate the general case for class action in a rent-seeking contest model, explaining why separate action adjudication is biased in the defendant’s favor and collective adjudication is bias-free. Separate action bias arises from the defendant’s investment advantage in capitalizing on centralized control over the aggregate (classwide) stake in the common question defense, while the plaintiff, with only an individual recovery at stake, spends much less. Class action eliminates bias by enabling both parties to make their best case through centralized optimal classwide investments. Our social benefit-cost analysis shows that class action surpasses alternative methods for achieving bias-free adjudication.

Number of Pages in PDF File: 61

Keywords: Class Actions, Civil Litigation, Liability, Torts

JEL Classification: K00, K13, K41

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Date posted: October 27, 2011 ; Last revised: September 20, 2014

Suggested Citation

Spier, Kathryn E. and Rosenberg, David, A Contest Model of Separate Action versus Class Action Litigation (October 14, 2011). Forthcoming, Journal of Legal Analysis; Harvard Public Law Working Paper No. 11-28. Available at SSRN: http://ssrn.com/abstract=1950196

Contact Information

Kathryn E. Spier (Contact Author)
Harvard University - Law School - Faculty ( email )
1575 Massachusetts
Hauser 302
Cambridge, MA 02138
United States
(617) 496-0019 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Michael Rosenberg
Harvard Law School ( email )
1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-496-4558 (Phone)
617-495-1110 (Fax)
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