Suits with Negative Expected Value

The New Palgrave Dictionary of Economics and the Law, Peter Newman, ed., Vol. 3, pp. 551-554, Palgrave MacMillan, 1998

Harvard Law and Economics Discussion Paper No. 226

12 Pages Posted: 24 Mar 2004 Last revised: 8 May 2009

See all articles by Lucian A. Bebchuk

Lucian A. Bebchuk

Harvard Law School; European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Date Written: 1998

Abstract

This essay focuses on negative-expected-value suits (NEV suits) -- suits in which the plaintiff would obtain a negative expected return from pursuing the suit all the way to judgment. The essay surveys the existing theories as to why, and when, plaintiffs with NEV suits can extract a positive settlement amount.

Keywords: Litigation, settlement, frivolous suits, negative expected value suits.

JEL Classification: K19, K41

Suggested Citation

Bebchuk, Lucian A., Suits with Negative Expected Value (1998). The New Palgrave Dictionary of Economics and the Law, Peter Newman, ed., Vol. 3, pp. 551-554, Palgrave MacMillan, 1998, Harvard Law and Economics Discussion Paper No. 226, Available at SSRN: https://ssrn.com/abstract=92468

Lucian A. Bebchuk (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States
617-495-3138 (Phone)
617-812-0554 (Fax)

HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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