Economic Theories of Settlement Bargaining

Annual Review of Law and Social Sciences, Vol. 1, pp. 35-59, June 14, 2005

25 Pages Posted: 23 Jun 2005

See all articles by Andrew F. Daughety

Andrew F. Daughety

Department of Economics, Vanderbilt University; Vanderbilt University - Law School

Jennifer F. Reinganum

Vanderbilt University - College of Arts and Science - Department of Economics; Vanderbilt University - Law School

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Abstract

We briefly review two basic models of settlement bargaining based on concepts from information economics and game theory. We then discuss how these models have been generalized to address issues that arise when there are more than two litigants with related cases. Linkages between cases can arise due to exogenous factors such as correlated culpability or damages, or they can be generated by discretionary choices on the part of the litigants themselves or by legal doctrine and rules of procedure.

Keywords: Multiple litigants, externalities, asymmetric information

JEL Classification: K41, D82, C78

Suggested Citation

Daughety, Andrew F. and Reinganum, Jennifer F., Economic Theories of Settlement Bargaining. Annual Review of Law and Social Sciences, Vol. 1, pp. 35-59, June 14, 2005. Available at SSRN: https://ssrn.com/abstract=746925

Andrew F. Daughety (Contact Author)

Department of Economics, Vanderbilt University ( email )

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Vanderbilt University - Law School

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Jennifer F. Reinganum

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States
615-322-2937 (Phone)
615-343-8495 (Fax)

Vanderbilt University - Law School

131 21st Avenue South
Nashville, TN 37203-1181
United States

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