Abstract

http://ssrn.com/abstract=567
 
 

References (8)



 
 

Citations (12)



 
 

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Optimal Awards and Penalties When the Probability of Prevailing Varies Among Plaintiffs


A. Mitchell Polinsky


Stanford Law School; National Bureau of Economic Research (NBER)

Daniel L. Rubinfeld


University of California at Berkeley - School of Law; National Bureau of Economic Research (NBER); NYU Law School



Abstract:     
This article derives the optimal award to a winning plaintiff and the optimal penalty on a losing plaintiff when the probability of prevailing varies among plaintiffs. Optimality is defined in terms of achieving a specified degree of deterrence of potential injurers with the lowest litigation cost. Our main result is that the optimal penalty on a losing plaintiff is positive, in contrast to common practice in the United States. By penalizing losing plaintiffs and raising the award to winning plaintiffs (relative to what it would be if losing plaintiffs were not penalized), it is possible to discourage relatively low-probability-of-prevailing plaintiffs from suing without discouraging relatively high-probability plaintiffs, and thereby to achieve the desired degree of deterrence with lower litigation costs.

Number of Pages in PDF File: 30

JEL Classification: K13

working papers series





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Date posted: February 1, 1997  

Suggested Citation

Polinsky, A. Mitchell and Rubinfeld, Daniel L., Optimal Awards and Penalties When the Probability of Prevailing Varies Among Plaintiffs. Available at SSRN: http://ssrn.com/abstract=567 or http://dx.doi.org/10.2139/ssrn.567

Contact Information

A. Mitchell Polinsky (Contact Author)
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
650-723-0886 (Phone)
650-723-3557 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Daniel L. Rubinfeld
University of California at Berkeley - School of Law ( email )
215 Boalt Hall
Berkeley, CA 94720-7200
United States
(510) 642-1959 (Phone)
(510) 642-3767 (Fax)
HOME PAGE: http://www.law.berkeley.edu/faculty/rubinfeldd
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
NYU Law School ( email )
44 West Fourth Street, Suite 9-53
New York, NY 10012-1126
United States
(212) 992 8834 (Phone)
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References:  8
Citations:  12
Footnotes:  25

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