Civil Litigation with Mandatory Discovery and Voluntary Transmission of Private Information

University of Alabama Economics Working Paper No. 03-08-01

29 Pages Posted: 23 Sep 2003  

Amy Farmer

University of Arkansas - Department of Economics

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: August 2003

Abstract

We consider models of pretrial negotiations where both costly voluntary disclosure and costly mandatory discovery are possible. When the uninformed party makes the final offer (the screening game), mandatory discovery will be utilized, if it is not very costly, but voluntary disclosure will not occur in the absence of a discovery procedure. When the informed party makes the final offer (the signaling game), mandatory discovery is never utilized, but voluntary disclosure will be utilized if it is not too costly to do so. Thus, mandatory discovery is effective in the information structure under which voluntary disclosure is not and vice versa. The results suggest that, taken together, the two institutions will lead to a great deal of information revelation and will significantly increase the probability of settlement.

Keywords: Mandatory Discovery, Voluntary Disclosure, Civil Litigation

JEL Classification: K41, C7

Suggested Citation

Farmer, Amy and Pecorino, Paul, Civil Litigation with Mandatory Discovery and Voluntary Transmission of Private Information (August 2003). University of Alabama Economics Working Paper No. 03-08-01. Available at SSRN: https://ssrn.com/abstract=433280 or http://dx.doi.org/10.2139/ssrn.433280

Amy Farmer

University of Arkansas - Department of Economics ( email )

Fayetteville, AR 72701
United States
501-575-6093 (Phone)
501-575-3241 (Fax)

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

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