Rethinking Forum Shopping in Cyberspace

Abstract

A game-theoretic analysis of forum shopping reveals how opportunities for strategic choices can influence the behavior of plaintiffs and defendants. If neither party has the opportunity to make strategic choices about participation or forum choices, we should expect no adverse selection or moral hazard problems. By contrast, if only one of the parties can control both the participation and forum selection choices, then we could expect pervasive adverse selection and moral hazard problems. In this paper we build on this simple game-theoretic framework, to analyze Dreyfuss and Ginsburg's (2001) Draft Convention on Jurisdiction and Recognition of Judgments in Intellectual Property Matters. We suggest that if the parties are faced with a bilateral strategic problem (i.e., if one party has control over one strategic choice and the other party has control over the other strategic choice), the extent of opportunistic behavior by either party, and the resulting deadweight losses, are likely to be minimized. In this respect, the Dreyfuss-Ginsburg proposal sensibly minimizes the strategic problems of forum shopping and creates an enforcement scheme which leaves intact the innovation incentives underlying intellectual property rights.