Symmetric and Asymmetric Information Models Living Together: Evidence from Brazilian Courts

13 Pages Posted: 30 Jun 2018 Last revised: 16 Jul 2018

See all articles by Fernando Corrêa

Fernando Corrêa

Brazilian Jurimetrics Association

Julio Trecenti

Departamento de Estatística

Date Written: June 29, 2018

Abstract

Priest & Klein (1984) is one of the most influential legal publications of all time. The authors states that the distribution of lawsuits is not the same as the distribution of disputes. Under efficiency and symmetry assumptions, plaintiffs and defendants rationally choose when to prosecute, ensuring that only highly unpredictable disputes becomes lawsuits. Priest and Klein model found support on several empirical tests across the years, but the tests are usually based on U.S. evidence. In this paper, we test the model once again using a unique data set from São Paulo's Court, in Brazil. We also analyze the cases behavior when the court offers waiver fees. Our evidence favors the Priest and Klein hypothesis on the no fee waiver scenario, considering both the win rates and other hypothesis derived from the original paper. However, an asymmetric information model seems more suitable for the fee waiver scenario, although we analyze very similar cases on both scenarios.

Keywords: litigation models, symmetric information, asymmetric information

JEL Classification: C4, K7

Suggested Citation

Corrêa, Fernando and Trecenti, Julio, Symmetric and Asymmetric Information Models Living Together: Evidence from Brazilian Courts (June 29, 2018). Available at SSRN: https://ssrn.com/abstract=3205741 or http://dx.doi.org/10.2139/ssrn.3205741

Fernando Corrêa (Contact Author)

Brazilian Jurimetrics Association ( email )

Rua Gomes de Carvalho, 1356, Vila Olímpia
São Paulo, São Paulo 04547-000
Brazil

Julio Trecenti

Departamento de Estatística

Brazil

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