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
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: Suggested Citation